Prime Minister Saad Hariri stressed Tuesday that Lebanon should utilize oil and gas wealth once extracted to expand the size of the economy and create more jobs for the youth.
“Our main objective is the optimal and sustainable development of Lebanon’s resources to benefit all Lebanese, today and for future generations. As an oil importing country, we have been dependent on fuel imports to fulfill our domestic consumption. This has rendered our balance of trade highly sensitive to fluctuations in international oil prices and the size of local demand,” Hariri said.
The prime minister made theremarks at the opening of “Oil and Gas Forum: Roadmap” held at ESA Business School.
He revealed that the Cabinet will be adopting the draft taxation law for petroleum activities and sending it to Parliament, adding that the oil sector is one of the most important files on Lebanon’s economic agenda.
He emphasized that his Cabinet gives priority to the good governance and management of this sector.
“We want all stakeholders, indeed, all of society to participate and invest in it. The potential discovery of resources in our seas is the reason we are here today. It raises hopes of economic growth, prosperity and poverty reduction. It also raises challenges that will need to be addressed to maximize rewards in an equitable, accountable and transparent fashion,” he added.
Hariri told the participants and experts at the conference that in the years 2000 and 2002, geophysical service companies performed two-dimensional multi-client surveys within Lebanon’s maritime Exclusive Economic Zone.
“Following this, a geological and geophysical study was performed in 2004 to determine the hydrocarbon potential in the area. The results revealed high prospects for the presence of hydrocarbon reserves under our seabed. Numerous steps have since been taken to bring Lebanon closer to becoming an oil and gas producer,” Hariri said.
He reminded that in 2010, Lebanon ratified the offshore Petroleum Resource Law.
“This law sets the foundations for ensuring prudent production of hydrocarbons, while providing long term investment incentives, and a sustainable revenue management mechanism through the establishment of a Sovereign Wealth Fund,” Hariri said.
The prime minister said after the passage of this law, the government appointed the Lebanese Petroleum Administration in 2013, to act as a regulator for the sector.
“Since 2012, the work undertaken by the Lebanese Petroleum Administration, including the Strategic Environment Assessment, as well as the extensive work undertaken by the Finance Ministry, Environment Ministry, the ministerial committees and Parliament, prepared the ground for the oil and gas sector to emerge,” he addedHe outlined the measures his Cabinet has taken to speed up the oil and gas exploration in Lebanon.
“To signal the importance we give to this sector, our new Cabinet passed in its first meeting two pending decrees related to the tender protocol, the model contract and block delineation,” Hariri said.
He added that the first offshore licensing round was firmly relaunched in January to attract the best reputable international oil companies.
“We are determined on setting a national energy roadmap; one that merges with Lebanon’s economic, social, geopolitical and developmental policies. This national energy policy will be characterized by proper governance and accountability,” Hariri said.
He promised that the oil and gas industry will eventually address environment, public health, education, vocational training, scientific research, revenue management, corporate governance and transparency.
“Today, the Lebanese government is determined to go through with the first round of oil and gas tenders in a transparent fashion. This has been highlighted by the Cabinet’s decision to join the Extractive Industries Transparency Initiative, which is a multi-stakeholder initiative that offers civil society a seat at the table and empowers them to actively contribute to governing their national wealth by having general oversight over the oil and gas sector,” Hariri said.
He assured that the government is set on integrating the exploitation of Lebanon’s oil and gas wealth in the real economy.
“Our aim is to increase employment, strengthen our social safety nets and raise living standards. We are hopeful that this will bring about a new economic reality, that will raise demand for employment enough to curb migration of our youth out of the country,” Hariri said.
He also vowed to take appropriate precautions to minimize any negative consequence from the production of oil and gas.