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Q1. What are the main legal laws and regulations put in place to date?
The Offshore Petroleum Resources Law (OPRL), the Petroleum Activities Regulations (PAR), the Pre-qualification Decree and the Exploration and Production Agreement (EPA) together form a strong regulatory framework that govern the upstream petroleum industry in Lebanon.
The OPRL sets out framework conditions to guide the formulation of acceptable commercial incentives through authorizations granted to private companies for undertaking the prospection, exploration and extraction of petroleum resources in Lebanon.
The PAR defines the application decrees for the OPRL and provides the regulations pursuant to conducting petroleum activities.
The Pre-qualification Decree sets the criteria of the pre-qualification phase. The evaluation process is undertaken by assessing the applicants against of legal, financial, technical, and quality, health, safety and environmental (QHSE) criteria.
Finally, the EPA is a contract between the State and international or Lebanese oil companies that provide companies with the right to explore for, develop and produce oil and gas resources offshore Lebanon’s Exclusive Economic Zone (EEZ).
Q2. Who governs the petroleum sector in Lebanon
In order to enhance good governance and transparency, the law attributes specific and different, yet complementary powers to the Parliament, the Council of Ministers, line ministries, the Minister of Energy and Water and to the Lebanese Petroleum Administration (LPA). Additionally, citizens, non-governmental organizations (NGOs), academic and technical institutions and the private sector are important players in the oil and gas industry.
Q3. What is the role of the LPA?
The LPA is an independent technical, regulatory and advisory public entity in charge of managing the petroleum sector in Lebanon within the supervisory authority of the Minister of Energy and Water. The principal objective of the LPA is to contribute to creating the greatest possible value for the economy and the society resulting from the activities undertaken in the oil and gas industry, while protecting the environment.
This is performed through prudent resource management and through strategic, economic and financial, technical, geological and environmental plans. The LPA exerts all the necessary efforts to ensure a successful, transparent and sustainable development process in all stages of petroleum activities to promote continuous interest in Lebanon’s offshore hydrocarbon potential. The LPA abides by a participatory approach with other governmental bodies, international organizations, academia and civil society.
for more information on the LPA’s specific roles within each department.
Q4. What is the role of the Minister of Energy and Water ?
The Minister of Energy and Water reports to the Council of Ministers, and is responsible, among other duties, to sign the EPA upon authorization of the Council of Ministers; to ensure the implementation of the Petroleum Policy and the OPRL; to promote the State’s petroleum potential and supervise petroleum operations; to take the necessary measures to protect water, health and the environment from pollution in case of emergency. Most of the decisions taken by the Minister of Energy and Water require the Council of Ministers’ approval, and the Minister's decisions are shaped by the LPA’s technical advice and recommendation.
Q5. What is the role of the Council of Ministers (CoM)?
The CoM is the executive authority that approves the decrees related to petroleum activities. The CoM also sets forth the State’s petroleum policy and makes final decisions in relation to any conflicting opinions; takes the final decision regarding Exploration and Production Agreements; authorizes the Minister of Energy and Water to sign the EPA; appoints the LPA’s board of directors; sets the applicable rules related to the LPA’s functioning; sets the content of the license applications and the due fees; and decides on extending the duration of the exploration and/or production period after consulting the LPA, among other responsibilities.
Q6. What is the role of the Parliament?
The Parliament is the legislative authority responsible for the approval of laws. The Parliament exercises a constitutional control over the Council of Ministers and the Minister of Energy and Water, which is put into action through questions, interrogations, vote of confidence and parliamentary enquiries.
Q7. What is the role of Civil Society Organizations (CSOs)?
CSOs are responsible of overseeing the oil and gas sector, holding politicians accountable in case they fail to abide by best practices while managing the sector, and ensuring that transparency measures are implemented where applicable. Additionally, CSOs play a major role in advocating for the sector to move forward and in shaping policy making during consultative processes. CSOs are also responsible to disseminate information related to the petroleum sector in order to educate the general public and engage in public discussions and debates, while managing expectations.
Q8. What is the role of a National Oil Company (NOC)?
Most countries with significant petroleum commercial discoveries have established an NOC whose objective is to increase and optimize the national benefits from the petroleum development and to ensure an active role at the commercial level.
Q9. What are the transparency measures adopted in the petroleum sector in Lebanon?
Lebanon has established a strong legislative framework
including the Offshore Petroleum Resources Law (OPRL), the Petroleum Activities Regulations (PAR), the Pre-Qualification Decree and the Exploration and Production Agreement, to safeguard transparency and accountability.
Article 162 (prevention of corruption) of the PAR, stipulates that in addition to the Lebanese applicable laws, the petroleum activities shall also abide by the laws of the country of formation, the registration place of the right holders and their affiliated companies, the convention on combating bribery of foreign public officials in international business transactions and the United Nations Convention Against Corruption (UNCAC).
Additionally, based on Article 162 of the PAR, the LPA has introduced into the model EPA two articles addressing transparency measures (articles 41 and 42).
Finally, Lebanon is undertaking the required steps to being an Extractive Industries Transparency Initiative (EITI) implementing country to support the efforts already taken regarding information disclosure, financial transactions and beneficial ownership.
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