Syrian oil is clawing its way back, methodically. Onshore, the immediate issue is returning Syria’s existing oil production to Damascus. Most producing fields are concentrated in Deir ez-Zor and Hasakah in the northeast, territory Damascus lost during the civil war, eventually to the Kurdish-led Syrian Democratic Forces (SDF).
Courtesy of a January military offensive against the SDF, Damascus has recovered the most important Deir ez-Zor assets, including the largest (Omar), the Tanak oil field, and the Conoco gas field. The Syrian Petroleum Company (SPC) then restarted the transfer of crude from Omar and Tanak to the Baniyas refinery.
Damascus has already taken control of the main Hasakah oil assets, including Rmeilan and Sweidiya. SPC teams began taking them over in February, and crude from Rmeilan and Sweidiya began moving to the Homs and Baniyas refineries in March. HKN Energy was preparing to begin operations at the government-controlled Rmeilan fields by June. Gulfsands separately confirms that SPC took custody of Khurbet East and Yousefieh in late February/early March.
ConocoPhillips has already returned, in a June agreement with SPC and Novaterra Energy to rehabilitate existing onshore gas fields and develop new production. They are targeting an additional 4 million to 5 million cubic meters of gas per day within the first year, equivalent to roughly 140 million to 170 million cubic feet per day. MEES describes it as SPC’s largest upstream development…
Syrian oil is clawing its way back, methodically. Onshore, the immediate issue is returning Syria’s existing oil production to Damascus. Most producing fields are concentrated in Deir ez-Zor and Hasakah in the northeast, territory Damascus lost during the civil war, eventually to the Kurdish-led Syrian Democratic Forces (SDF).
Courtesy of a January military offensive against the SDF, Damascus has recovered the most important Deir ez-Zor assets, including the largest (Omar), the Tanak oil field, and the Conoco gas field. The Syrian Petroleum Company (SPC) then restarted the transfer of crude from Omar and Tanak to the Baniyas refinery.
Damascus has already taken control of the main Hasakah oil assets, including Rmeilan and Sweidiya. SPC teams began taking them over in February, and crude from Rmeilan and Sweidiya began moving to the Homs and Baniyas refineries in March. HKN Energy was preparing to begin operations at the government-controlled Rmeilan fields by June. Gulfsands separately confirms that SPC took custody of Khurbet East and Yousefieh in late February/early March.
ConocoPhillips has already returned, in a June agreement with SPC and Novaterra Energy to rehabilitate existing onshore gas fields and develop new production. They are targeting an additional 4 million to 5 million cubic meters of gas per day within the first year, equivalent to roughly 140 million to 170 million cubic feet per day. MEES describes it as SPC’s largest upstream development contract to date.
At the same time, Western and Gulf companies are moving into offshore exploration.
Russia was at one point set to become Syria’s principal offshore partner. The civil war hindered that development, and the fall of Assad makes it clear that (for now), it won’t be Russia. The companies now positioning themselves in Syrian Mediterranean waters are American, French and Qatari.
Chevron signed an agreement in February with the Syrian Petroleum Company and Qatar’s Power International Holding to evaluate offshore oil and gas exploration. In May, TotalEnergies, QatarEnergy and ConocoPhillips reached a separate agreement with SPC to assess offshore Block 3 near Latakia and create a potential exploration framework.
And all the while, Syria is quietly dismantling Russia’s Assad-era asset base. Per an agreement last weekend, Syria is reclaiming control over Russia’s two key military bases and its commercial foothold at Tartous.
Russia will relinquish control of the Hmeimim air base to Tartous port and civilian facilities (including an airport). Any remaining Russian military facilities will be converted into Syria-Russian training centers. All of this is expected to conclude in three months.
Hmeimim gave Russia an air base that let it project military power across Syria and the eastern Mediterranean. Tartous gave Russia’s navy a permanent Mediterranean foothold. This isn’t an eviction, though. Moscow retains access and a military relationship with Damascus–just not its autonomy to act.
Damascus has also cancelled the 2019 deal with Russia’s STG Stroytransgaz to manage and develop the commercial port at Tartous. Only months later, Damascus signed an $800-million, 30-year agreement with UAE-based DP World to develop the port. The Tartous transfer is already happening. On August 12, Syria started receiving wheat and cement at the previously Russian pier. Pier No. 4, the commercial berth previously used by Russia, while Russian personnel were seen leaving buildings around the pier.
But Russia still retains some leverage because Syria has become heavily dependent on its crude. Still, Damascus has told Washington it is prepared to drastically reduce those imports in return for the removal of the remaining U.S. state-sponsor-of-terrorism designation. Syrian officials are already looking for alternative suppliers.
