Lebanon’s latest stride in the realm of oil and gas exploration has captured attention, as the exploration vessel “TransOcean Barents” embarks on operations within Block 9. This undertaking is orchestrated through a collaboration between French Total Energies, Italy’s Eni, and Qatar’s energy company. Lebanon’s announcement of this venture comes in the wake of the maritime border demarcation agreement with neighboring Israel. Simultaneously, a discussion on the prospect of establishing a sovereign fund to manage the potential income emerged from oil and gas exploration gained momentum in Lebanon.

LIMS has been an advocate for temperance in this matter, emphasizing that Lebanon seems to be “selling the bear’s skin before catching the bear.” As it stands, no concrete discoveries of oil or gas have been confirmed. Moreover, even if these natural resources are indeed found, which remains uncertain, it will be several years before revenues begin to flow—a point that underscores the premature nature of discussions surrounding revenue management.

Regarding the proposition of establishing a sovereign wealth fund, LIMS has issued a sobering reminder of Lebanon’s history with such funds and councils. Over the past few decades, these entities have been breeding grounds for corruption, rather than prudent management. Moreover, despite Lebanon’s prolonged economic crisis, political leadership has yet to take concrete steps to enhance governance, casting doubt on its capacity to responsibly manage newfound wealth for the benefit of the people.

Drawing parallels to the Central Bank’s role, which functioned somewhat akin to a sovereign wealth fund, LIMS underscores that despite international acclaim for its independent management, it ultimately incurred more than $80 billion in losses. These losses, largely attributed to its inability to withstand political pressures and continued funding of government expenditures, serve as a cautionary tale.

As Lebanon sets its course in uncharted economic waters, the nation grapples with significant hurdles on the path to harnessing its newfound energy resources for the greater good—a journey fraught with complexities and challenges that warrant prudent navigation.

• Is the Sovereign Oil and Gas Fund an anti-corruption initiative? August 4, 2023: Annahar, Article AR
• President Of The Lebanese Institute For Market Studies For Al-Sharq: Qatar’s Investments In Energy Are Exemplary, August 7, 2023: Al sharq, Article AR
• After The Arrival Of The Exploration Ship.. What Is The Technical Path For The Recovery? August 17, 2023: Al Hurra, Article AR
• The Only Way To Preserve Oil And Gas Wealth Is To Remove The Hands Of Political Authority From It And Give The Right To Dispose Of It To The Lebanese People, August 29, 2023: Addiyar, Article AR
• There Is A Huge Risk That Oil And Gas Money Will Be Wasted, August 30, 2023: SBI, Article AR