Managing expectations, a top priority for the Lebanese oil and gas sector

In this interview given to Ramez El Kadi on Al Jadeed TV, Dr Carole Nakhle, CEO of Crystol Energy, discusses the importance of the proper governance of the Lebanese oil and gas sector, and outlines the major steps ahead.

Key takeaways:

1. The biggest mistake any government could make, including the Lebanese government, is to pin all their hope on the oil and gas sector especially when no discoveries have been made.
2. Even if a discovery is found, first its commerciality needs to be appraised; if it proves to be commercial, then it can take several years to develop the needed infrastructure for production and exports. Lebanon is in dire need for structural reforms; its economy cannot wait that long.
3. In the oil and gas industry, the exploration phase carries the most risk due to the geological uncertainty which cannot be eliminated even with the best technologies today.
4. The overall governance of the oil and gas sector will dictate whether any discoveries could lead to positive spillovers to the Lebanese economy or not. Experience shows that countries with weak institutions have suffered from the resource curse, which has led to greater poverty, weaker economic growth, worse corruption and even conflict.
5. The priority should be given to the local domestic market then an export strategy should be adopted depending on the size of the volumes produced.