What does the regulatory framework support?
The existing regulatory framework for offshore upstream oil and gas operations in Lebanon provides the platform for supporting in-country value creation.
OFFSHORE PETROLEUM RESOURCES LAW (OPRL)
Article 67 Local content:
- “A Right Holder as well as its subcontractors shall give priority to Lebanese persons in the award of contracts for construction of a Facility and the supply of material, goods and services related to Petroleum Activities when terms and conditions offered by Lebanese suppliers are equal to their competitors.”
- “A Right Holder as well as its subcontractors shall employ qualified personnel of Lebanese nationality whenever available. Right Holder shall also organise and fund the training of Lebanese personnel associated with Petroleum Activities.”
PETROLEUM ACTIVITIES REGULATION (PAR)
Article 157 Procurement and local content:
The Right Holder shall ensure that the Operator gives preferential treatment to the procurement of Lebanese originating goods and services when such goods and services are internationally competitive with regard to quality, availability, price and performance. Lebanese originating goods and services are those that in substance or measured by value added are predominantly manufactured, constructed or performed in Lebanon, by Lebanese or by an entity owned and controlled by Lebanese.
EXPLORATION AND PRODUCTION AGREEMENT (EPA)
Article 27 Procurement and supply bases:
“In selecting Contractors for the provision of services in relation to Petroleum Activities, the Operator shall select, when possible, individuals who are Lebanese or Entities which are majority-owned or controlled by Lebanese nationals and that provide such services through permanent establishments in Lebanon, provided that...
- the Operator, in its judgment acting reasonably, is satisfied (on the basis of demonstrated ability, experience, quality, timely performance, workmanship and other relevant criteria) within their ability to properly perform the work entrusted to them;
- the cost of such services does not exceed one hundred and ten per cent (110) % of the lowest acceptable cost of the equivalent or similar services offered by or otherwise available from foreign individuals or Entities that are not majority-owned or controlled by Lebanese nationals; and
- the other terms and conditions applicable to such services are otherwise competitive with those available from foreign individuals or Entities that are not majority-owned or controlled by Lebanese nationals.”
“In purchasing goods, the Operator shall give preference to goods which originate from Lebanon, or are manufactured or constructed in Lebanon, in each case by Entities that are majority-owned or controlled by Lebanese nationals, provided that...
- the Operator is reasonably satisfied (on the basis of demonstrated quality, workmanship, availability in the quantity and at the times when needed, and, as may be appropriate, availability of service and support, and other relevant criteria) with the fitness of the goods;
- the goods price does not exceed one hundred and five per cent (105%) of the lowest acceptable all-inclusive cost offered by or otherwise available for equivalent or similar goods that do not originate from Lebanon, are not manufactured or constructed in Lebanon or are not supplied by Entities that are not majority-owned or controlled by Lebanese nationals; and
- the other terms and conditions on which such goods are offered or otherwise available are competitive with available goods that do not originate from Lebanon, are not manufactured or constructed in Lebanon or are not supplied by Entities that are not majority-owned or controlled by Lebanese nationals.”
- ...“The Exploration Plan and each Development and Production Plan shall include a plan for retaining Lebanese companies as Contractors and Subcontractors, including priority rules meeting the requirements set forth in this Article.”...