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Another red flag

We must not squander the chance to build a clean oil and gas sector

by Executive Staff

On Friday, July 1, two men walked toward a microphone to speak as representatives of their respective political parties, but not in their official capacity as ministers. Following a closed-door meeting, they declared the end to a three-year feud. A bilateral deal had been reached concerning the nation’s potential hydrocarbon resources. Lebanon was set to finally close its first offshore oil and gas licensing round which is a decision cabinet was supposed to make. After reading a statement that any thinking person will tell you means absolutely nothing (unless it’s laced with coded language only true insiders can decipher), a reporter’s request for details was rebuffed with a promise that consultations with the prime minister would be held. With that, the two men left. A fait acompli, in local political parlance. In all fairness, it was probably a stunt and the deal looks dead (see cover story page 14), but either way, the whole thing stinks.

First and foremost, the deal shouldn’t have been discussed in private by two political parties. By law, it is cabinet’s job to set the country’s oil and gas policy while the “oil deal” meeting is far more egregious, it is sadly the rule for how this sector has been officially discussed in the past two years. Prime Minister Tammam Salam created a ministerial committee to debate oil and gas back in early 2014. The committee met only a few times. Instead of using the official venue on offer, each individual minister had the Lebanese Petroleum Administration (LPA) come for a one-on-one visit to explain the sector and the LPA’s vision for an oil and gas strategy. Oil and gas is a complicated and technical topic. Imagine if the LPA gave the ministerial committee 15 or 20 workshops on the subject, first bringing everyone up to speed on the basics of how the industry works and then outlining different options for a Lebanese oil and gas strategy while weighing the pros and cons of various choices. We would have more informed ministers. The “classroom” environment would help those from rival camps see how the other side thinks, which could help avoid future years long delays at important junctures as cabinet decides on every step forward in this sector. If these workshops were televised (and made permanently avail- able on YouTube), interested citizens and civil society groups would today be more equipped to oversee this sec- tor as it is born and hopefully grows. Moving forward, this must be our model. There is no legitimate reason for talk on this subject to be secret. All oil and gas discussions must be public.

Equally offensive was the reaction to the deal. Where was civil society? The silence is shameful. Civil society must protest questionable proceedings like these. The method of protest is irrelevant. At least do something a statement, anything. Except tire burning. Please.

Weeding corruption out of the system is a long-term goal that will take time and effort. It has been grow- ing for decades, and its roots have a strangle hold on nearly every state institution. The nascent oil and gas sector, however, is an opportunity. Three years ago Executive asked how millions of dollars in survey data revenue are being managed. We were answered with a defamation lawsuit (which we won this month, for the re- cord). Two years ago, we noted a flaw in the prequalification process that allowed Mohamad Chouqair, head of the Beirut chamber of commerce, and Mahmoud Sidani, chairman of Unigaz, to participate in the first licensing round. Their company is registered in Hong Kong and they pay a yearly fee to obscure their ownership of it (Panama Papers, anyone?). Perhaps not surprisingly, the disclosure changed nothing. It is time we all wake up. This sector is being built from scratch and we have the chance to get something right. We must not squander it.

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