Oil revenues to be placed in sovereign fund

01 February 2017

BEIRUT: Bidding for Lebanons offshore oil blocks will be transparent and oil revenues will be deposited in a sovereign wealth fund, President Michel Aoun said Tuesday. The oil and gas blocks will be subject to transparent and openly monitored tenders, Aoun said, according to a statement released by his office. There is a sovereign wealth fund for oil, its fund and returns will be invested in order to achieve development.

The president was speaking during a meeting with delegation from the Lebanese Press Syndicate visiting the presidential palace in Baabda.

Seismic studies, which began in 2013, indicate that Lebanon possesses several trillion cubic feet of oil and gas within its territorial waters.

Aoun promised that the whole of the country will benefit from the oil and natural gas off Lebanons shores. All that is going to be extracted from Marjayoun [in south Lebanon] to Arida [in the north] will be the property of the Lebanese people, he said. Future generations will benefit from this money, as this is natural wealth that should be preserved and used to finance projects.

After a nearly three-year delay, the Cabinet approved two crucial gas and oil exploration decrees in early Jan. 2017.

A third governmental decree at the end of Jan. stipulated that Lebanon would join the Extractive Industries Transparency Initiative, a global body governing oil and gas resources.

Countries that sign on to the EITI retain transparency mandates that require companies operating in their territory to disclose information such as production numbers and payments to local communities and the public sector in reports that are made available to the public.

The step sets a new precedent in the countrys administration of public affairs as Lebanon usually scores low on international transparency and public corruption indices.

Aoun has continuously vowed to eliminate corruption in state institutions. Another step in this effort was made by establishing the role of Minister of State for Combating Corruption in the Dec. 18 Cabinet formed under Prime Minister Saad Hariri.

Aoun has also made promises to improve the countrys dilapidated infrastructure and to lobby for administrative decentralization of public institutions.