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January 07, 2016 | English and Arabic | Reinoud Leenders
Safeguarding against Corruption Risks in Lebanon’s Offshore Petroleum Sector

Given Lebanon’s dismal track record in countering corruption and its chronically gridlocked political process, the risks of corruption in the country’s nascent petroleum sector are significant. Sources of concern pertain to the Lebanese Petroleum Administration’s mandate and relative insulation from political interference, sub-optimal transparency in the pre-qualification process, envisaged non-disclosure of exploration and production agreements, and the questionable assumption that sub-contracting for offshore petroleum activities will be largely self-regulating. In addition, a range of state institutions and agencies that will be crucial to daily petroleum governance are unlikely to cope if not drastically reformed. If or when Lebanon’s petroleum reserves are confirmed, there are a number of policy choices that should be made, including the establishment of a national oil company, designating the role and management of a ‘sovereign fund’, and possibly more radical proposals for petroleum revenue expenditure and sharing. This brief argues that a lively and informed national debate on the specificities and technicalities of Lebanon’s petroleum sector may help to create the prerequisites of political change and foster more favorable conditions to counter the risks of corruption.

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