Syria’s oil discoveries: Media-political propaganda without economic feasibility

An oil field in northeastern al-Hasakah governorate (Reuters)

An oil field in northeastern al-Hasakah governorate (Reuters)

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Enab Baladi – Muhammed Fansa

The Syrian regime’s government has repeatedly announced the possibility of discovering oil or gas fields through new geophysical surveys in Syria after the investing companies withdrew from previous surveys without announcing any discoveries in the energy field.

The Director General of the Syrian Petroleum Company, Firas Qaddour, spoke about the current “many investments” to discover several oil fields in Syria, on 24 July, on the sidelines of the Syria International Petroleum Exhibition (SyrPetro).

Qaddour said that among the investments is a project north and south of Damascus, and another in the Zumlat al-Maharr area near Palmyra city in the Syrian desert, adding that the excavation work seeks to increase the production of gas and oil quantities to supplement “the national economy and alleviate the fuel crisis.”

The investment values ​​and economic feasibility of the projects are “very large,” while the oil field needs between 10 and 15 million dollars to complete the surveying and drilling operations, and the cost of drilling any medium-sized oil well is from 5 to 6 million dollars. Also, building the stations is very expensive, Qaddour said.

The economic feasibility would cover the costs and increase profits according to the reserves that can be produced in the field, he added.

The Zumlat al-Maharr gas field, which was discovered at the end of 2021, is still in the stage of completing exploration, testing, and evaluation, and its oil reserves cannot be predicted, but he estimated it at about 9 billion m3, the oil official said.

Propaganda for local and international goals

In February, the Director of the General Petroleum Corporation, Nabih Khrestin, announced the Ministry of Oil’s plan to overcome the shortage of fuel and oil derivatives by entering “new exploratory” areas that were not previously accessible, comprising about 16 exploration, development and production wells, with the hope that results will be issued during this year. 

Mahmoud al-Hussain, a researcher and engineer specializing in oil and gas, told Enab Baladi that what the Syrian regime is doing with regard to the repeated announcements of the existence of underground wealth to reveal them is “political propaganda.”

The official narrative of the Syrian regime is promoting abroad that Syria contains underground and oil wealth, which is one of the reasons for “targeting Syria and waging war on it.”

The state-run news agency (SANA) periodically publishes coverage of what it describes as “the theft of oil by the American occupation” from the fields in northeastern Syria, which are under the control of the Syrian Democratic Forces (SDF), and transferring it to Iraqi territory.

On the local level, Syrian researcher Mahmoud al-Hussein said, “The regime is sending a message through this news to the population in the areas under its control, with investments and oil discoveries that will solve the crisis of oil derivatives that it is suffering from.”

The researcher added that the Syrian regime is unable to provide fuel and electricity in its areas of control, due to the presence of most of the oil and gas wells in the areas under the control of the Kurdish-led Syrian Democratic Forces (SDF) in the governorates of Deir Ezzor and al-Hasakah, in addition to the presence of a global energy crisis.

In all its published news about oil investments and discoveries, the regime does not give accurate numbers, as its news is characterized by “ambiguity,” without providing details such as expected returns from discoveries, economic feasibility, and contracted companies, because its goal in announcing discoveries is promotion and not sharing news, according to al-Hussain.

Syrian oil in numbers

According to a study by the Harmoon Center for Studies, in June 2021, what can be extracted from crude oil, which the total oil reserves of Syria before 2010 amounted to 24 billion barrels, is the least part, and this depends on technology, capability, drilling experience, and stock management, and therefore the part that can be produced does not exceed seven billion barrels, of which about five billion barrels were produced until 2010.

The total domestic production of oil in Syria has decreased to less than 30 percent since 2010, at a time when the budget of the Syrian regime has fallen to nearly two-thirds, in a country that is not considered an oil producer compared to neighboring countries such as Iraq and the Gulf States.

Syrian wells produced about 385,000 barrels per day, 0.5 percent of global production in 2010, according to “BP” (formerly known as British Petroleum), the third largest private oil company in the world.

The Islamic State (IS) took control of large swathes of eastern Syria in 2014, where most oil and gas wells are located, and production decreased to between 30 and 40 thousand barrels per day, part of which was consumed locally, and another part was sold on the black market.

Then, the SDF took control of the eastern region in 2017 and seized the revenues as one of its main sources of financing, bringing the regime’s oil production to about 27,000 barrels since then.

The Syrian oil fields are distributed by six fields in al-Hasakah, four in Deir Ezzor, and two fields in the Palmyra region in central Syria, which are the only fields under the regime’s control.

Failed investments

In May 2021, the administration of US President Joe Biden decided not to extend the decision to exempt US sanctions against the American Delta Crescent Energy company, which was active in northeastern Syria.

The oil company’s exemption from US sanctions under the Caesar Act expired on 30 April 2021.

At the time, a source in the administration claimed that President Biden has a policy toward Syria, and this policy is that “we are not in Syria for the sake of oil, we are in Syria for the people.”

The former US President, Donald Trump, stated in November 2019 that the US forces would remain in northeastern Syria “only for the sake of oil” and that they might “have to fight for the oil,” which provoked angry reactions in Damascus and Ankara (Ankara classifies the US-backed forces as terrorists).

Researcher Mahmoud al-Hussain mentioned the failed experience of the Russian Soyuzneftegaz company when the Syrian regime announced, in 2013, oil explorations in the territorial waters off the Syrian coast, and after seven years, the company withdrew without significant results.

Although Russia was an ally of the regime and had economic projects in the country, the Russian company tried to hide its identity to escape the Caesar Act sanctions, according to al-Hussain.

At that time, the Russian Soyuzneftegaz company practiced manipulation by changing its name and nationality to evade US sanctions, according to an investigation presented by a group of researchers published in the Harmoon Studies Center in September 2020.

In 2021, Russia tried to seize the al-Taim and al-Ward oil fields in the countryside of Deir Ezzor within the regime’s control area through its experts, which it sent there.

By investing in the two fields, Russia aimed to restore these wells to their previous production capacity, as the production of al-Taim is estimated at 2500 barrels per day and al-Ward at 5,000 barrels.

The company suspended exploration work a month after sending Russian experts to these two fields after learning that the feasibility of investing in the fields was almost non-existent, according to Harmoon‘s study.

Syrian experts rule out any foreign company from participating in oil exploration investment projects at the present time for fear of US and Western economic sanctions.

In terms of security, oil companies usually venture to operate in dangerous areas, but in the Syrian case, sanctions remain an economic obstacle to the companies’ work until a political settlement is reached, al-Hussain said.

In order to study the economic feasibility at the technical level, there must be a real geophysical survey on the ground and transparency in the numbers, and this is absent on the part of the Syrian regime, as there is a stage of exploratory wells to know the feasibility, and when production can be done, and in general the exploration and evaluation period takes a long period of time that exceeds a year, according to al-Hussain.

The regime-controlled areas suffer from a shortage of fuel, which was demonstrated by the fact that the Ministry of Internal Trade and Consumer Protection in the government of the Syrian regime raised the selling prices of subsidized and unsubsidized gasoline to nearly double in August, and the delay in receiving notifications for the delivery of fuel to residents, as it sometimes takes more than 100 days to receive a gas cylinder.

 

 

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