Lebanon’s long term vision for the sector evolves around the establishment of the oil and gas sector in such a way to ensure Lebanon’s competitiveness, to create value for economic and social development, to guarantee energy security and to enhance accountability for the stewardship of present and future generations.
The attainment of this long term vision is premised on five core principles that constitute the pillars of Lebanon’s petroleum sector development.
The oil and gas sector must contribute to the provision of affordable and uninterrupted energy supply for Lebanon.
Lebanon relies almost totally on imported energy products. Any hydrocarbon discoveries in Lebanon, in particular Natural Gas, shall contribute to the reduction of energy dependency on external markets. The locally produced Natural Gas shall feed into the existing and planned power plants to provide a relatively less expensive and cleaner electricity to Lebanon. Other sectors, especially the industrial sector can gradually benefit from the presence of the indigenous Natural Gas and rely on it for cheaper production.
The oil and gas sector must, at all times, seek to pragmatically meet the needs of the present without compromising the ability of the future generations of Lebanese to meet their own needs.
To optimize resource extraction and realize the potential of Lebanon’s offshore hydrocarbon resources, exploration, development and production must be undertaken in a prudent, safe and environmentally friendly manner as stipulated in the Offshore Petroleum Resources Law. The objective is to ensure that the petroleum sector is efficiently and sustainably developed taking into account all potential risks and uncertainties. Sound technical solutions will be relied upon to ensure optimal reservoir recovery while limiting waste. Additionally, effective revenue management modalities should be put in place and implemented.
The oil and gas sector must produce positive spillover effects on the Lebanese economy and must be able to retain value from oil and gas operations through Lebanese participation in the sector.
The upstream oil and gas sector should constitute one of the enablers for economic development through direct and indirect value creation across its development phases and without crowding out investments in other productive sectors. Specific consideration should be made to ensure that oil and gas activities taking place in Lebanon are increasing at a pace that allows the development of local industries and the gradual employment of nationals in the sector as well as in other sectors. The legislative framework of the oil and gas sector requires that Right Holders employ and train Lebanese personnel whenever available and offer preferential treatments when purchasing goods and services from Lebanese providers.
The oil and gas sector must contribute to enhancing the attractiveness of Lebanon for risk capital and the competitiveness of the Lebanese industries.
Lebanon is adopting a competitive and open system to attract investors to the sector. The increased competitiveness shall improve the overall position of the State and shall maximize benefits to Lebanese citizens. The upstream oil and gas sector requires large investments and stipulates significant risks. Lebanon will require the participation of experienced and financially capable International Oil and Gas Companies (IOCs) and service providers, therefore the upstream sector should strive to strike the right balance between maximizing the State share on one hand, and incentivizing IOCs to take full investment risks on the other hand. The predictability and stability of the legislative framework and the governing institutions are of utmost importance for the attractiveness of the sector in Lebanon.
The oil and gas sector must clearly demonstrate, at all times, an integrated, participatory and inclusive approach to governance and must operate within a strong system of rewards and consequences.
Since 2007, Lebanon has proceeded with the development of an oil and gas legislative framework that embraces best international practices related to accountability. Publication, disclosure and anti-corruption measures are embedded within the sector-related legislative framework and are put into practice on a daily basis. The sector will always strive to be inclusive and built on solid ground of trust with the Lebanese citizens fostered by maintained transparency.