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Dr Isabel Figuerola-Ferretti Garrigues
Dr Kostas Andriosopoulos And Dr Gürkan Kumbaroğlu
Energy International Risk Assessment
There is increased interest in oil and gas exploration offshore Lebanon, but the country lags behind Israel and Cyprus in developing its resources. There has been wide domestic criticism of the government's slow progress in developing Lebanon's petroleum resources, as symptomatic of the country's governance failure. However, in light of the state's weaknesses in the areas of control of corruption, rule of law and political stability, an accelerated path to the development of resources would have involved great risks.
From 2007 to 2012, Lebanon has gradually established the institutional and legal framework for the governance of the petroleum sector. Throughout this process, political parties have struggled to increase their influence over the sector - for instance in the Council of Ministers' appointment of members of the regulatory body or the parliamentary approval of the agreement with Cyprus on maritime boundaries. In the future, it is likely that further critical decisions will be stalled in the regulatory body (the Petroleum Administration) and the Council of Ministers, which memberships reflect the religious segments of Lebanese society. The political process of building coalitions of support for each milestone is indeed painstakingly slow, but it creates consensus around the policy outcome. And thanks to relatively high state administrative capacity and support from foreign technical advisors, the government has established an adequate framework for investment.
Over the last few years, significant new oil and gas exploration reserves have been discovered in East and West Africa, as well as the Eastern Mediterranean, the Caribbean and the Asia- Pacific region. These discoveries have very quickly added several new countries to the ranks of the world's oil- and gas-producing nations. These emerging oil and gas producers have shown a strong interest in advice on governance. They are keen to avoid the mistakes that have led to accountability failures in other, more established, producing countries.
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