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Syria's oil industry choked by conflict and sanctions

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(Globalpost/GlobalPost)

The European Union was set Monday to ease its embargo on Syria's oil production, which has dwindled to just a third of the level before the conflict erupted in March 2011.

Following is a rundown of the current state of Syria's oil sector:

PRODUCTION AND EXPORTS: From around 400,000 barrels of oil a day in early 2011 -- ranking the country as the world's 30th biggest oil producer -- the International Energy Agency (IEA) estimates that Syrian production has slipped to 130,000 barrels a day, or just over 0.1 percent of the world total.

An April report cited by the country's official media said oil exports, which previously accounted for more than a third of Syria's foreign trade, have dropped to almost zero.

Syria's total of exported goods, including oil, fell to $185 million (140 million euros) in 2012, compared with $7.2 billion in 2011 and over $11 billion in 2010.

OILFIELDS UNDER REBEL AND REGIME CONTROL: Syria's main oilfields are concentrated around the northeastern provinces of Deir Ezzor and Hassaka, near the Iraqi border, and is where key sector players such as Shell and Total operated until they suspended their activities. The oil from this region is of high quality.

The Britain-based Syrian Observatory for Human Rights (SOHR) estimates that the bulk of these oilfields are now controlled by rebels -- a main motive for the EU wanting to ease the embargo -- and Al-Nusra Front militants in particular.

President Bashar al-Assad's regime still controls the al-Omar oilfield -- one of the regime's last positions east of Deir Ezzor city -- and in the far northeast, the state-owned Syrian Petroleum Company (SPC) exploits some wells located in territory controlled by the Kurdish minority.

EFFECT OF THE EMBARGO: As a result of the EU oil embargo, which bans European companies from dealing with Syrian crude oil or supplying equipment, the country's oil and gas sector is now mainly serves domestic consumption.

Even when the embargo is lifted, future export opportunities remain meagre as the Syrian pipeline network directed toward the Mediterranean. Experts say the oil would therefore have to travel by tanker to Turkey and Iraq.

Before the conflict broke out, the IEA estimates that Syrian crude oil exports reached some 143,000 barrels a day, with the EU buying most of it.

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http://www.globalpost.com/dispatch/news/afp/130422/syrias-oil-industry-choked-conflict-and-sanctions