Greasy pol­i­tics in oil and gas

Fouad Makhzoumi is search­ing for a sec­u­lar fu­ture for the oil and gas sec­tor

Executive Magazine - - Transparency - By Jeremy Ar­bid

Apic­ture of Fouad Makhzoumi meet­ing Pope Fran­cis sits on a man­tel next to photos of other global fig­ures in the sa­lon of his multi-story man­sion in Le­banon’s posh Ram­let el Baida dis­trict. Ex­ec­u­tive had asked for a meet­ing with the busi­ness­man, phi­lan­thropist, and politi­cian to dis­cuss Le­banon’s po­ten­tial petroleum re­sources. Makhzoumi has thus far or­ga­nized two con­fer­ences aim­ing to build con­sen­sus in Le­banon’s oil and gas sec­tor, and is plan­ning another con­fer­ence for later this year fo­cus­ing on cor­po­rate ethics in the oil and gas in­dus­try.

Makhzoumi is chair­man and chief ex­ec­u­tive of­fi­cer of multi­na­tional com­pany Fu­ture Pipe In­dus­tries, a man­u­fac­turer of pipe sys­tem so­lu­tions for the wa­ter, oil and gas, and in­dus­trial sec­tors. He is the man be­hind the Makhzoumi Foun­da­tion, a lo­cal non-gov­ern­men­tal or­ga­ni­za­tion pro­vid­ing vo­ca­tional train­ing, healthcare, and mi­cro-fi­nanc­ing to un­der­priv­i­leged in­di­vid­u­als. His po­lit­i­cal ca­reer in­cludes found­ing Le­banon’s Na­tional Di­a­logue Party, a self-de­scribed sec­u­lar po­lit­i­cal party pub­lish­ing al-Hi­war news­pa­per.

What is your vi­sion for de­vel­op­ing Le­banon’s oil and gas sec­tor?

I [re­turned]to Le­banon from the Gulf in the early 1990s. For me, ev­ery­body that suc­ceeds abroad has an obli­ga­tion to come back and pass on some of their ex­pe­ri­ence. Un­for­tu­nately, we were wrong be­cause what we have seen is a sys­tem that does not al­low pro­fes­sion­als to come in.

I be­lieve that if we want to go for real de­vel­op­ment, we need to go for the un­der­de­vel­oped re­gions. Plus, eco­nom­i­cally it makes a lot of sense – I need land, I need ac­cess to main roads, I need ac­cess to the borders be­cause most of our in­dus­try is for ex­port – it makes sense. I would like to con­cen­trate not on Ba­troun where the min­is­ter would like to – Ba­troun is a touris­tic [area], and peo­ple there are not hun­gry. Where we need to de­velop in­stead is in Akkar and in the South. In Akkar I have two op­tions – one is to train for oil and gas, and the sec­ond is to plan for the re­con­struc­tion of Syria. This should be the vi­sion.

In your view, is oil and gas just another po­lit­i­cal bar­gain­ing chip?

Oil and gas is the fu­ture of our coun­try, that’s why we went for it. His­tor­i­cally what we have seen is that ev­ery po­ten­tial in­come gen­er­at­ing sec­tor is di­vided [along] sec­tar­ian [lines]: telecom­mu­ni­ca­tions, Suk­leen, the air­port, the duty free, the port. This is yours and mine, but we will both ap­prove the trans­ac­tion in the cab­i­net and the par­lia­ment so that no­body can claim [cor­rup­tion]. [The 1940s] was the first time we drilled for oil in this coun­try, so we have known about it for 60 plus years. But the re­gional pow­ers, Syria and oth­ers – why would they al­low Le­banon to be­come eco­nom­i­cally in­de­pen­dent when re­ally there are so many po­lit­i­cal is­sues that are still boiling?

The whole dy­nam­ics of the re­gion is chang­ing. For Le­banon it means [that] un­til this re­gional so­lu­tion is set­tled, why would you al­low war­ring par­ties in Le­banon ac­cess to cash in or­der to stop be­ing in a po­si­tion [where] they have to ne­go­ti­ate for a set­tle­ment. You starve the coun­try – which is what’s hap­pen­ing. Dur­ing this pe­riod our politi­cians fig­ured maybe let’s see if we can di­vide the fu­ture wealth of Le­banon among our­selves, so that when the deal is al­lowed, then I [as a cor­rupt politi­cian] have my con­ces­sions on this one, my op­tion of 10 – 20 per­cent, my up­front fees, and this way we can se­cure [wealth for] our [fam­i­lies]. And this is what we have fought to stop.

How might they di­vide the fu­ture off­shore oil and gas wealth?

It is easy. Le­banon is di­vided ge­o­graph­i­cally [and] by sect – Shi­ite, Sunni, Druze, Ma­ronite. So each one of these [for­mer war­lords, who now lead these com­mu­ni­ties] de­cided that if [a dis­cov­ery is made out at sea, near­est to their] ter­ri­to­ries then it is theirs; not theirs [in the sense that] there is a reg­is­tered cer­tifi­cate with it, but it is theirs po­lit­i­cally un­der the [no­tion that] ‘I need to de­velop my peo­ple’ and to cre­ate jobs for them. But most of their peo­ple have noth­ing to do with the deal, be­cause the deal is per­sonal.

When you say politi­cians have di­vided up the coun­try and each one has his area, would they have some sort of role in the part­ner­ship of a joint ven­ture?

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