Oil wealth fund a top priority: ministers, MPs
Lebanese ministers and lawmakers pledged Thursday to speed up the creation of a sovereign wealth fund for future proceeds from oil and gas exploration.
The announcement came after a workshop to discuss the fund’s creation was held Thursday at the public library in the Parliament building.
The workshop came just days after a consortium of three international oil companies made bids to explore gas in blocks 4 and 9 off the Lebanese coast.
Energy and Water Minister Cesar Abi Khalil told MPs that the Lebanese Petroleum Administration is currently studying the two offers and will submit a report to be discussed and decided on by Cabinet.
“The long-awaited exploration in preparation for oil discoveries will put us on the energy map and at the heart of the alliances of the Eastern Mediterranean countries,” the minister said. He added that Lebanon has been able to develop an integrated legislative system consisting of the law on petroleum resources in marine waters and the law’s practical decrees, in addition to the tax law on petroleum. “The legislative framework is ready to enter the exploration phase, which extends for five years,” Abi Khalil said.
The creation of the wealth fund was one of the conditions set by international transparency agencies and a number of Lebanese political parties to ensure proceeds from oil and gas exploration are placed in the right hands.
The minister stressed that the volume of revenues flowing into the fund would depend on the development of the oil and gas sector in Lebanon, in terms of the frequency of licensing cycles and the volume of discoveries made.
The participants in the workshop stressed that there should be strict supervision of the wealth fund’s management once the body is formed.
MP Mohammad Qabbani said that if discoveries are made, it will take around seven to eight years before Lebanon will see significant returns. “The Law of Petroleum Resources in Marine Waters (Law No. 132, dated 24/8/2010) first stipulates the formation of a body to manage the petroleum sector and secondly, that the proceeds collected from the state resulting from petroleum activities shall be deposited in a sovereign fund,” he said in a statement, adding that the purpose of sovereign wealth funds is to accumulate assets and financial reserves: “These funds have become global institutional investment entities that manage assets worth billions of dollars.”
It is not clear yet when will the LPA send its final recommendation on the offers made by the French, Italian and Russian firms.
Prime Minister Saad Hariri and other senior officials hope to review the offers in the coming days.
The workshop’s participants listened to the experience of Norway in the management of oil proceeds.
Lawmakers Yassine Jaber and Anwar Khalil proposed a law for the establishment of the sovereign fund, which will be discussed and reviewed by the parliamentary committees.
The Daily Star