An LCPS-NRGI course by The MENA Natural Resource Governance Hub 10–18 September 2015 Beirut,

Fundamentals of Oil and Gas Governance

1 An LCPS-NRGI course by The MENA Natural Resource Governance Hub 10–18 September 2015 Beirut, Lebanon

Fundamentals of Oil and Gas Governance

About the hub The MENA Natural Resource Governance Hub was established in 2014 by LCPS and NRGI as part of a worldwide network of six regional hubs on natural resource governance. The overarching goal of this hub is establishing a nexus of natural resource knowledge and expertise as well as promoting effective monitoring and transparent and accountable management of extractive industries in the and North Africa (MENA) region. The hub provides regionally relevant policy knowledge and technical expertise through research and training, primarily to key players from oversight bodies in the region including CSOs, journalists, and parliamentarians. The hub's activities focus on three pillars: Capacity building, policy research, and policy forums.

1 Background to the Course Oil and gas extraction have the potential to generate significant revenues, which governments can channel into public service delivery and economic development. However, the state too often plays an outsized role in the sector, concentrating influence in the hands of those officials who allocate licenses and collect revenues. Citizens play no part in the generation of these rents, and information imbalances hinder public oversight and the ability to hold government to account. In the MENA region, oil producing countries collect large rents from their petroleum sectors. Yet, the absence of transparency, government accountability, and effective management of natural resources has left the region plagued with high levels of corruption and patronage alongside poor human development indicators. A decade of economic growth in the MENA region averaging 4.3% between 2000 and 2010 did not create enough jobs for the growing population, and income inequality worsened over the same period. At the same time, public input and accountability deteriorated in most Arab countries. Popular dissatisfaction with economic governance was a key driver of the Arab Spring and economic and social inclusion will be fundamental to sustaining a successful political transition. Oil and gas represent a fundamental source of financing for economic diversification, job creation, and development in the MENA region. Reforming this sector will be crucial to solidifying wider reforms that lead open societies and economies to deliver strong development outcomes for their people. Ensuring successful reform in the MENA region requires active and informed oversight by citizens and media, a factor that has been lacking to date. Course Details Dates The course will take place Language over nine days in September When?2015: 10 September until 18 The main language of September, including a day instruction is Arabic. off in between and a one-day Objective A few sessions will be regional conference on oil and conducted in English. This training course aims gas challenges in the MENA Why? Simultaneous translation to enhance the knowledge region. Participant registration will be provided for of participants in relation and course introduction will sessions taught in English. to the oil and gas sector take place on 9 September. and develop skill sets through lectures, panel discussions, and group exercises, which can be put to use in their respective fields. Structure This course includes: Fees and Scholarships • Interactive lectures on general concepts Around 30 scholarships are available • Comparative analysis of current situations for civil society actors and media • Case studies from the MENA region representatives from , Lebanon, • Practical exercises Libya, and Tunisia on a competitive • One-on-one evening clinics with experts to discuss basis. Scholarships cover all reasonable particular challenges and request advice expenses incurred by participants, • Presentations by guests from the MENA region including course fees, round trip tickets • Several closed and public panels bringing together to Beirut for non-Lebanese participants, Participants different stakeholders from the sector as well as accommodation and meals StructureAttendance certificates will be granted for all participants. Scholarships for The eligible participants to participants that satisfactorily Lebanese participants are made possible for the course are civil complete all course requirements. by the generous contribution of the society members and Norwegian Embassy in Lebanon. Other journalists who have scholarships are made possible by NRGI. a strong interest in Additionally, a very limited number engaging in the sector, of tuition fee waivers are available for as well as academics, participants who cover their own travel experts, and practitioners and living costs during the course. Who?who would like to gain a Other participants from MENA countries better understanding of Scholarshipsare welcome to participate for a fee of the sector. $2,000, which does not include the cost of travel, accommodation, and dinners.

5 Understanding Contracts Amir Shafaie Course Description This module provides an overview of the different types of extractive sector contracts and introduces some key elements of contract content. The session will highlight key issues to focus on when trying to read and understand a contract and key questions to ask from a civil society/ media perspective. The session will be followed by a group exercise to practice reading and analyzing excerpts of actual extractive contracts. Fundamentals Challenges and Opportunities Governance Sami Atallah and Laury Haytayan Roles and Responsibilities This module looks into the brief history of resource-rich countries, Laury Haytayan particularly in the MENA region, and links between oil and economic This module gives an overview of the various actors involved in oil and development, social welfare, equality, corruption, and authoritarian gas sector governance (local variation depending on institutional design). regimes. The aim is to highlight that, in most cases, these natural It highlights the responsibilities of national oil companies in particular resources have failed to contribute to sustainable development, despite and emphasizes good practices in relevant sectors across countries. their value and potential, and that civil society has a major role in ensuring the good governance of a nation's wealth. Transparency and Contract Disclosure Diana El Kaissy Oil and Gas Essentials This module introduces EITI, its goals, framework, standards, and Carole Nakhle achievements as well as its shortfalls. It also focuses on the importance of This module gives an overview of different sources of energy and why transparency and availability of information for the various stakeholders energy matters. It tackles fundamental issues of energy demand such as in the oil and gas sector and how it affects good governance. taxing and subsidizing oil products and energy efficiency. It also provides an introduction to understanding the inner workings of the petroleum Revenue Management industry, covering the different steps of the oil and gas supply chain from upstream and downstream activities. Macro Challenges and Policy Instruments Nadine Aboukhaled Institutional Structure The objective of this module is to provide participants with a basic understanding of the particular challenges associated with oil and gas Legal Framework revenue management and the macro policy options to ensure revenues Amir Shafaie are spent to the benefit of citizens. The session covers concepts such This module introduces the various legal instruments typically included as volatility, Dutch disease, and absorptive capacity, followed by a in a country’s overall legal framework for the extractive sector. discussion on policy options and tools available for policy makers to It highlights the role and interaction of these instruments and stabilize budgets and save for future generations. Finally, participants emphasizes the importance of cohesion and avoiding divergence within are introduced to public accountability mechanisms that encourage the legal framework. compliance with these rules. Fiscal Regimes Revenue Distribution to Regional Authorities Carole Nakhle Sami Atallah This module covers the evolution of petroleum fiscal regimes and the This module summarizes ways in which revenue can be shared between spectrum of relationships, concessionary regimes, and contractual regimes, central and local authorities, and presents different allocation providing insight into desirable features of fiscal regimes. It highlights the mechanisms for oil and gas revenues. The module focuses on the importance of upstream taxation and looks into government and investors' necessity of objective and transparent allocation, including topics such objectives in assessing investment opportunities. as environmental and social compensation, development balance between regions, conflict resolution, and accountability.

7 Introduction to Public Financial Management Panel Discussions Nadine Aboukhaled This module discusses key aspects of pubic financial management that Governance and Revenue Management play a strong role in transforming resource revenues into tangible benefits This discussion will focus on the prerequisites for and basis of good for citizens. The session introduces the budget process and key public governance as well as the roles and responsibilities of different stakeholders financial management tools necessary to create an enabling environment in governing the oil and gas sector and maintaining transparency. for efficient, accountable, and transparent public spending. Civil Society in Action This discussion will be held between various members of civil society Sector Impact organizations across the MENA region to provide real examples of how civil Environmental and Social Management society is engaging with decision makers and other stakeholders, and how Ricardo Khoury it is taking an active role in pushing for solid policies and transparency in This module introduces environmental and social impact assessments natural resource governance. along the production chain, covering environmental and social issues that can arise from oil and gas projects and the tools available to appraise Practical Sessions and manage their impacts. It includes a discussion on how media and The practical sessions will allow participants to examine their countries’ NGOs can play a more effective role in enforcing the implementation of challenges in the oil and gas sector in a group-based context. Participants environmental and social safeguards in oil and gas projects. will map out stakeholders in the sector as well as identify priority Local Content challenges and areas where civil society can possibly intervene or have Walid Nasr an impact. Participants will then brainstorm possible solutions and focus This module presents local content issues related to the oil and gas on developing courses of action that could later be implemented in their sector in general and will focus on one or more of the four hub countries country-specific contexts. The work and findings will be showcased in in particular, looking at the non-oil economy and use of oil revenues. group presentations at the end of the course. The module covers issues related to employment, skills and technology transfer, business development and competitiveness, greater participation Conference in the extractive sector, and development of downstream industries. In conjunction with the course, the NRG Hub is organizing a one-day Economic Diversification regional conference that will highlight key challenges concerning oil Sami Atallah and Zeina Hasna and gas facing the Arab World. The conference will be an opportunity for This module will look into the importance of diversification for a participants to listen to prominent Arab and international speakers and country's long-term economic growth. It will examine the failures and interact with a wide range of stakeholders involved in the sector. The successes of resource-rich nations in expanding their sources of income conference will focus on three main topics: beyond oil and gas. The principles, rationale, and various policies of 1 Geopolitics and Conflict diversification will be discussed and analyzed, as well as the measurement This theme will examine geopolitical issues in the MENA region, with a focus of economic and export diversification. The concept of product space will on falling oil prices, reduced dependency of the US on the MENA region for be introduced. oil, and the relationship between conflict and sector mismanagement. 2 Good Governance and Decentralization This theme will focus on the role and capabilities of national legislative bodies in ensuring good governance and contract transparency as well as the role played by regional authorities in managing the oil and gas sector. 3 Diversification and Economic Development This theme will address how MENA countries must diversify their economies to create job opportunities and ensure sustainable development.

9 Course Schedule

Wednesday Welcome & Saturday Institutional Tuesday Revenue Thursday Sector Impact Introduction Structure Management Participants arrive on Wednesday 9 at the latest in time to attend an 12 15 17 September September evening session and dinner September September 18:00–20:00 Welcome, Ground Rules, 09:00 Recap Session 09:00 Recap Session 09:00 Recap Session Logistics 09:30–10:30 Legal Framework 09:30–11:30 Macro Challenges & 09:30–11:00 Local Content 20:00 Dinner Amir Shafaie Policy Instruments Walid Nasr Nadine Aboukhaled 10:30–11:00 Break 11:00–11:30 Break Thursday Fundamentals 11:30–12:00 Break & Sector Impact 11:00–13:00 Fiscal Regimes 11:30–13:00 Economic Diversification Carole Nakhle 12:00–13:00 Revenue Distribution to Sami Atallah & Zeina Hasna 10 Regional Authorities September 13:00–14:00 Lunch Sami Atallah 13:00–14:00 Lunch 09:00–11:00 Challenges & Opportunities 14:00–16:00 Understanding Contracts 13:00–14:00 Lunch 14:00–16:00 Panel Discussion: Sami Atallah & Laury Haytayan Amir Shafaie 14:00–15:00 Introduction to Public Civil Society in Action 11:00–11:30 Break 16:00–18:00 Practical Session: Country Financial Management 16:00–17:00 Practical Session: Group Analysis of Challenges Developing Solutions 11:30–13:00 Environmental & Nadine Aboukhaled & Stakeholders Social Management 15:00–17:00 Panel Discussion: Governance Ricardo Khoury and Revenue Management Friday Evaluation Sunday Day Off Farouk Al-Kasim & Collaborative 13:00–14:00 Lunch 18 Action 14:00–16:00 Environmental & 13 September Wednesday Regional Social Management September Conference Ricardo Khoury 16 09:00 Recap Session Monday Governance September 09:30–11:00 Practical Session: Friday Fundamentals & Sector Impact Developing Solutions 14 11:00–11:30 Break 11 September September 11:30–13:00 Practical Session: Final 09:00 Recap Session Group Presentations 09:00 Recap Session 09:30–10:30 Roles & Responsibilities 13:00–14:00 Lunch 09:30–11:00 Environmental & Laury Haytayan Social Management 14:00–16:00 Conclusion: Remarks, Ricardo Khoury 10:30–11:00 Break Evaluation, Reflection & Post-Course Action 11:00–11:30 Break 11:00–13:00 Transparency & Contract Disclosure 11:30–13:00 Oil & Gas Essentials Diana El Kaissy Carole Nakhle 13:00–14:00 Lunch 13:00–14:00 Lunch 14:00–16:00 Practical Session: Analysis 14:00–16:00 Oil & Gas Essentials to Action & Identifying Carole Nakhle Possible Solutions

11 Trainers

Nadine Farouk Sami Zeina Aboukhaled Al-Kasim Atallah Hasna is an MENA region economic is a renowned Iraqi oil and gas is the director of the Lebanese is an economic researcher at analyst with NRGI based in Beirut, expert who, upon moving to Center for Policy Studies. He is the Lebanese Center for Policy where she primarily focuses Norway, became instrumental currently leading several policy Studies working on oil related on revenue management and in establishing the Norwegian studies on the governance issues. Her research focuses governance of natural resources, Petroleum Administration between of Lebanon’s gas sector and on the spillover effects of in addition to providing capacity 1968 and 1973. He also played economic diversification in oil discoveries on countries' building and technical assistance a key role in developing the the Arab world. Atallah is co- economic structure using the to governments, parliamentarians, Norwegian Petroleum Directorate, editor of Local Governments product space approach. She is and civil society organizations. one of the most highly reputable and Public Goods: Assessing currently assessing the types of Aboukhaled served as a senior regulatory institutions in the Decentralization in the Arab policies that must be adopted to economic officer for the Lebanese world, where he served as Director World. He also published a ensure economic diversification. Ministry of Finance under a of Resource Management from paper on industrial policy in Hasna is a recipient of the Said UNDP project where she provided 1973 until 1991. Since then, he the Arab world with Ibrahim Foundation, British Lebanese macroeconomic and fiscal policy has been working with a number Elbadawi in Omran Journal titled Association and Cambridge advice and was responsible for of developing countries to improve ‘Rehabilitating industrial policy Commonwealth, European & the public debt management governance of their petroleum in the Arab world: Lessons of International Trust Award for portfolio. Prior to that, she served sector as well as ensure lasting the past, the challenges of the the MPhil Economic Research as an economist at the Central benefits for their citizens. present, and the prospects for Program at University of Administration of Statistics. the future’ and co-authored the Cambridge and was the internal paper ‘The emergence of highly coordinator of the Marshall sophisticated export products: Economic Research Group at the Evidence from Lebanon.’ University of Cambridge.

13 The atmosphere was constructive and Laury Haytayan Diana Kaissy is the MENA senior officer at is the MENA region coordinator interactive. It was NRGI’s Beirut office. She leads for Publish What You Pay. She both regional parliamentary is primarily responsible for and media projects, as well as coordinating with PWYP’s Arabic- an opportunity for the development of the MENA speaking coalitions in the MENA natural resource governance region, specifically in Iraq, hub. Haytayan also sits on the , Tunisia, Libya, Jordan, advisory board of the Lebanese and Lebanon. Kaissy also serves everyone to learn Oil and Gas Initiative. Prior to on the advisory board of the joining NRGI, Haytayan was Lebanese Oil and Gas Initiative, the executive director of Arab a Lebanese NGO that actively from a wide spectrum Region Parliamentarians Against promotes civil society's role in the Corruption (ARPAC), where she governance of natural resources. worked with legislators from Kaissy was previously working as Arab parliaments, developing the Lebanon country manager for of experience. strategies and action plans the charity PACES, which seeks to to strengthen the oversight use sports programs to motivate and legislative capacities of and empower children living in Aymen Hershi parliamentarians to promote Palestinian refugee camps. Kaissy Gafsa Citizens Organization, Libya a culture of transparency, is a member of the board of accountability, and rule of law. PACES, Lebanon chapter.

15 Ricardo Khoury Carole Nakhle Walid Nasr Amir Shafaie is an environmental consultant is an energy economist is a board member of the is the senior legal analyst at with extensive experience specializing in international Lebanese Petroleum Administration NRGI, where he works on delivering HSE services to the petroleum contractual and head of the LPA’s Strategic technical assistance and oil and gas industry, particularly arrangements and fiscal regimes Planning Department. capacity building programs to in Syria, Iraq, UAE, Qatar, Saudi for the oil and gas industry, Nasr previously held several help governments and oversight Arabia, Libya, Nigeria, the Caspian world oil and gas market senior managerial and technical actors improve natural resource region, and more recently in the developments, and oil and gas positions with United Nations governance. Shafaie’s work at Balkans. He has worked for major revenue management. Nakhle agencies in Lebanon and abroad, NRGI focuses on legal reform IOCs such as Shell, Total, and BP; is the director of Crystol Energy working closely with governments and the role of natural resource governments (such as the Iraqi (UK), serves as a consultant and public institutions at both contracts. His MENA work includes Ministry of Oil and Montenegro’s for the IMF and World Bank, the national and international projects in Tunisia and Libya. Ministry of Economy); and and economic advisor for the levels. He has extensive He is also active in NRGI’s legal engineering firms and contractors in Commonwealth Secretariat. She professional expertise in diverse work in Africa and Central Asia the oil and gas sector (such as Foster is also an associate lecturer developmental fields including as well as on NRGI’s international Wheeler, Technip, Samsung, Petrofac, in energy economics at the policy planning and programming advocacy in favor of greater and Subsea7). He has also prepared University of Surrey, research in energy, environment, and transparency in the natural and delivered environmental fellow at the Lebanese Center sustainable development. resource sector. Shafaie's pro bono training courses particularly in the for Policy Studies, and scholar at experience includes volunteering field of impact assessment in the oil the Carnegie Middle East Center. with the International Senior and gas sector. She has authored two books: Lawyers Project. Petroleum Taxation: Sharing the Wealth and Out of the Energy Labyrinth.

17 Organizers

The training I received The Lebanese Center for Policy Studies Founded in 1989, the Lebanese Center for Policy Studies is a Beirut-based independent, non-partisan think tank whose will help me strengthen my mission is to produce and advocate policies that improve good governance in fields such as oil and gas, economic development, fight against fraud in the oil public finance, and decentralization. www.lcps-lebanon.org and gas sector and has already helped me gather technical, legal, and management data. The Natural Resource Governance Institute The Natural Resource Governance Institute helps people realize With my increased knowledge the benefits of their countries' endowments of oil, gas, and minerals. NRGI does this through technical advice, advocacy, applied research, policy analysis, and capacity development. and awareness of the issue, I It works with innovative agents of change within government ministries, civil society, the media, legislatures, the private will play a more efficient role sector, and international institutions to promote accountable and effective governance in the extractive industries. as an activist. www.resourcegovernance.org

Fattoum Oueslati Tunisian Association of Public Auditors, Tunisia

19 Application Process

FILL OUT PROVIDE Successful applicants Application Endorsment Letter will be notified in early form along This should be on August and may be 1 with needs 3 organizational letterhead asked to complete pre- and signed by the direct course assignments. assessment supervisor of the applicant, form or in the case of a director/ LCPS and NRGI will head of organization jointly review received applying, by the chair of applications with an the organization's governing eye on the quality of board or steering committee. essays and the relevance of the course in light PROVIDE of current knowledge, Curriculum stated needs, motivation Vitae to attend, and ability of 2 the applicant to work on oil and gas governance in DEADLINE his/her organization. July 20th

SUBMIT Application 4 to

[email protected]

21