Is there a lot of oil in Syria? DWN: The war in Syria is not against IS, but for supremacy in the oil and gas market
US Ambassador to the UN Nikki Haley said that after the US began "limited" airstrikes in the early hours of 04/14/18 in Syria, the US will continue its illegal presence in the country until the US achieves its objectives in the area. - says Whitney Webb .
US units, under the pretext of fighting ISIS (banned in Russia), have been in Syria since 2015. Since then, American troops have become an occupying force. The US now occupies nearly a third of Syria's territory, including most of the land east of the Euphrates River, including large swaths of the Deir Ezzor, al-Hasakah and Raqqa regions.
Although there are currently between 2,000 and 4,000 troops stationed there, the Americans have announced the preparation of a 30,000-strong "border force" made up of Kurdish and Arab allies. According to Washington’s plans, “border guards” will prevent the establishment of legitimate authority in northeastern Syria.
However, after Turkey's harsh reaction to the American initiative, plans were slightly changed, but the United States continues to train "local forces" in the area. Russian military sources claim that former ISIS members remaining after the defeat should be included in their ranks.
Thus, the American authorities do not intend to reunify Syria, but will continue to occupy this region in the long term, pursuing two goals: to retain resources for American corporations and to destabilize the situation until a change of power in the country and in Iran.
Natural fuel resources
Northeast Syria is an important region due to its wealth of natural resources, especially fossil fuels in the form of natural gas and oil. This area contains 95% of Syria's entire oil and gas potential, including al-Omar, the country's largest oil field.
Before the war, these resources produced about 387,000 barrels of oil per day and 7.8 billion cubic meters of natural gas annually and were of great economic importance to the Syrian government. Today, almost all of Syria's existing oil reserves, estimated at 2.5 billion barrels, are located in the area occupied by US government forces.
In addition to Syria's largest oil field, the US and its proxies also control the country's largest natural gas plant, Conoco. It can produce nearly 50 million cubic feet of gas per day. This production was built by the American oil and gas giant ConocoPhillips, which operated it until 2005, that is, before the imposition of sanctions by US President Bush. Along with Conoco, other foreign oil companies such as Shell also left Syria.
During today's American occupation of the area, oil and gas produced in the region are already benefiting US energy corporations, with whom Trump and his administration have numerous ties.
According to Yeni Shafak, the US, along with Saudi Arabia, Egypt and Kurdish officials, held meetings where decisions were made on extracting, processing and selling fossil fuels collected in the region. The Kurds receive a significant share of the profits. Allegedly, since 2015, Kurds have been earning more than $10 million monthly using foreign fuel.
Syrian Kurdistan exports its oil to Iraqi Kurdistan, which is then sold to Turkey. Although American corporations are not officially involved in the scheme, the deal between the Syrian and Iraqi Kurds was supported by unnamed "oil experts" and "oil investors." There are no signed agreements between the Kurds in Syria and Iraq. The Kurds were simply informed of the decision and instructed to control the situation.
A source in the Kurdistan Regional Government of Iraq (KRG) told NOW News that the Kurds receive cash every month from representatives of more than 80 foreign companies involved in the oil trade, most of them in the United States. In this regard, it is safe to assume that many of the same players are also involved in the process of plundering oil and gas reserves in Syrian territory occupied by the Kurds and Americans.
Main corporate interests
This makes clear the mutual interest of the Trump administration and the US oil industry, since fired Secretary of State Rex Tillerson was previously the head of the ExxonMobil oil company. This corporation unilaterally entered into an oil deal with the Iraqi Kurds behind the back of the Iraqi government and expressed interest in exploiting Syrian oil deposits in territory occupied by the United States.
ExxonMobil also played a major role in the attempt to build a pipeline from Qatar, which Assad refused, which started the conflict in Syria. Trump himself, even before taking office, invested significant sums not only in ExxonMobil, but also in 11 other major oil and gas companies, including Total, ConocoPhillips, BHP and Chevron.
The replacement of Tillerson with Mike Pompeo did not change anything, since the new Secretary of State also has his own interests in the US oil and gas industry. Pompeo gets his stake from Koch Industries, which has significant interests in oil and gas exploration, drilling, pipelines and fossil fuel refining.
The United States believes that as soon as it leaves this region, all the wealth will go to Russia. To some extent, they are right, since under the terms of the signed energy agreement between Russia and the Syrian government, Moscow will have exclusive rights to oil and gas production in areas of Syria controlled by the Syrian authorities.
Since 2014, the United States has been actively trying to limit the capabilities of the Russian fossil fuel sector, especially its exports to Europe. America's goal is to replace Europe's energy supplier from Russia to the United States.
Back in 2014, former Speaker of the House of Representatives John Boehner wrote that it was possible to bring the Russian leader under control through the supply of natural energy. In his view, strengthening the Russian fossil fuel sector, whether in Syria or elsewhere, would undermine US strategic goals of maintaining a unipolar world.
However, not only oil and gas resources, but also the possibility of transiting the flow of hydrocarbons makes Syria a strategic player in the region. US control of northeastern Syria will have a major impact on future and existing pipelines. As The New York Times noted in 2013, “Syria’s favorable location makes it the strategic center of the Middle East.”
It is for this reason that much of US policy in the Middle East has been aimed at seizing control of territories, further dividing countries into safe transit routes for oil and gas. In relation to Syria, plans to divide the country were outlined back in the 1940s, when European oil interests began to emerge in the northeast of the country. Since then, several countries have attempted to occupy parts of northern Syria to secure control of the region, including Turkey and Iraq.
A critical pipeline already exists in northeastern Syria that connects Syria's oil fields with the Ceyhan-Kirkuk pipeline. Although this pipeline suffered severe damage in 2014, there are plans to reconstruct it or build a new pipe next to the existing one. Thus, northeastern Syria is capable of exporting oil to Turkey and further to Europe.
It is clear that this part of Syria remains key to US goals. According to the German publication Deutsche Wirtschafts Nachrichten, the United States has developed plans to build a new pipeline through northeastern Syria from the Persian Gulf to northern Iraq and Turkey, with the ultimate goal of supplying oil to Europe.
Russia, for its part, opposes the plan as it seeks to maintain its own lucrative fossil fuel exports to Europe.
Water and land
Another major asset located in northeastern Syria is its water reserves. As you know, water in the Middle East is a resource of paramount importance. The US-controlled part of Syria contains three of the world's largest freshwater bodies, fed by the Euphrates River.
The US now controls Lake Assad, which supplies Aleppo with most of its drinking water. In addition, the Tabqi Dam located there supplies the area with generated electricity. Another key hydroelectric power station is located at the Tishreen Dam and is also controlled by US forces and their collaborators.
In addition to rich water resources, northeastern Syria contains almost 60% of arable land, which is the basis of the country's food independence.
Before the conflict, Syria invested heavily in building irrigation infrastructure in the area so that agriculture would not be affected by widespread regional droughts. Much of this irrigation infrastructure is fed by the occupied Tabqi Dam. In total, water provides fertility to 640,000 hectares of agricultural land.
The United States hardly hopes to gain financial benefit from controlling the region's water and agricultural resources, but it does have significant leverage in this regard.
Washington could easily cut off water and electricity supplies to government areas to put pressure on the Syrian government and civilians.
Although such actions are a war crime, the US has already cut off water supplies to the city of Raqqa during the battle to liberate it. Türkiye has also cut off water from the Euphrates twice during the Syrian conflict to gain strategic advantage.
By controlling much of the country's water and agricultural land, not to mention its fossil fuel resources, the US occupation is not only fulfilling its goal of destabilizing Syria's government by depriving it of revenue, but also undermining the efforts of Syria and its allies to keep the country together.
In addition, the United States is doing everything to create enclaves of Wahhabis from Saudi Arabia there, following the example of Idlib, where large-scale terrorist forces are now concentrated.
Thus, the United States is gradually trying to achieve one of its main goals - to divide Syria, tearing away the northeast of the country from it.
It is no coincidence that throughout the Syrian conflict, the US government has repeatedly stated that partition is the “only” solution to the ongoing “sectarian” conflict in Syria, cynically keeping silent about the fact that this conflict was started precisely to tear apart the country.
The newly appointed John Bolton does not even hide the fact that the United States should unite northeastern Syria with northwestern Iraq and create a new territorial entity there with the working name “Sunnistan.” This new "ersatz state" will control the two countries' fossil fuel resources, as well as key water and agricultural resources.
Bolton called on Gulf Arab states, including Saudi Arabia, to finance the creation of this state. The Trump administration is trying to negotiate a “deal” by handing over the territory to Saudi control for $4 billion, which should be used for the required infrastructure reconstruction, while not forgetting its own interests.
Strategic goal - Iran
Control of key resources to divide Syria and destabilize the government in Damascus is the main, but still intermediate goal. The US strategic goal is Iran.
In 2002, US analytics firm Stratfor reported that occupying northeast Syria would significantly complicate the land route between Syria and Iran, as well as the land route between Iran and Lebanon. Tillerson, speaking at Stanford University, noted that “weakening” Iran’s influence in Syria is a key goal for the United States and one of the main reasons for the occupation of northeast Syria.
A private plane from the United Arab Emirates landed at Damascus International Airport at the end of June this year. Representatives from a number of US intelligence and security agencies were on board. After landing, the delegation went to a meeting with the Director of the General Directorate of Security of the Syrian Arab Republic, Major General Ali Mamluk.
Separately, I would like to dwell on the personality of Major General Ali Mamluk. He has been a member of the inner circle of Syrian President Bashar al-Assad for quite a long time. An experienced politician who knows how to find a common language with both Moscow and Tehran. Representatives of the monarchies of the Persian Gulf are also ready to communicate with him. For example, in 2015 he was in Saudi Arabia. It is Ali Mamluk who is entrusted with the most delicate assignments, including negotiations with the external enemies of official Damascus.
According to available information, the meeting between the American delegation and the director of the SAR Main Security Directorate lasted four hours. Various aspects of the Seven Years' War were discussed. Then the Americans made their proposal. They proposed the withdrawal of their troops from al-Tanf and the Eastern Euphrates on three conditions: Iran’s complete withdrawal from Syria, a share in oil production in northeast Syria, and receipt of intelligence about terrorists who could pose a threat to Western countries in the future.
This proposal was rejected by the Syrian side on all counts.
Regarding the presentation of terrorist intelligence, it was stated that its release depends on changes in the US political position towards Syria. The SAR is already sharing similar information with the UAE and Jordan.
Regarding Iran's complete withdrawal from Syria. On this point, the US delegation defends the interests of Israel, its main ally in the Middle East. In response, Ali Mamluk emphasized that Syria is a sovereign country, and that the United States is an occupier who entered the territory of the Syrian Arab Republic without permission, and in the same way the United States can leave it. He also noted that Syria is part of a broad axis, there is an alliance with Tehran and the Lebanese Hezbollah.
It should be noted that on Monday this week, information appeared in the Lebanese media that Hezbollah had received an official request from the Syrian government to remain in Syria after the end of the war to participate in the “post-conflict reconciliation” process.
Last week, the visit of Iranian Defense Minister Amir Khatami to the Syrian Arab Republic was successful. During this trip, the minister had a meeting with Syrian President Bashar al-Assad. During this visit, an agreement on military cooperation was signed between the parties.
Of course, the main condition on the part of the Americans was to receive their share in oil production in northeast Syria. Setting this condition reveals the true goals that caused the civil conflict in the country. The main task of the United States and its allies in the Syrian war is to seize the natural resources of the Syrian Arab Republic.
Regarding a share of Syria's oil reserves, Ali Mamlouk told the American delegation that Syria was not interested in doing business with countries seeking to overthrow its government. He also noted that on the issue of cooperation in the oil sector, there are Russia and other countries that did not conspire against the Syrian people.
The oil-rich region of Syria is located on the eastern bank of the Euphrates River. This territory is controlled by the Syrian Democratic Forces, created and supported by the United States. The Syrian Democratic Forces (SDF) are a largely Kurdish military group with a small presence of local Arab clans.
70 percent of Syria's oil fields are located in SDF-controlled territory. Before the war, in 2010, the share of oil industry income in the country's budget was 25%, now it is much less. The largest field in Syria is the al-Omar field, located near the city of Deir ez-Zor.
During a recent press conference by US Secretary of Defense Jace Mattis and Chairman of the US Joint Chiefs of Staff Joseph Dunford, it was reported that there are 2,200 US troops in Syria. The SDF group numbers about 50 thousand people.
The situation in the region under SDF control is complex. An attempt on the part of the Syrian government to resolve the issue exclusively by military means could lead to a direct military clash with the US Armed Forces and their coalition allies. And this factor must be taken into account.
The main hope is for internal Syrian dialogue. A dialogue is already underway between part of the Kurdish movement and Damascus, and the issue of some autonomy for the region is being considered. It arose immediately after the US-Turkey deal on the Syrian city of Manbij, which hit the interests of the Kurds. The Kurdish movement split into two parts: part went to negotiations with the Syrian government, the second part is still following US policy.
There are also examples of successful economic cooperation between the Kurds and the Syrian government. There is an exchange of oil from the Al-Omar field in Deir ez-Zor, which is controlled by YPG/PKK, for fuel in a certain proportion. The Syrian government and the Syrian Democratic Forces have reached an agreement on joint management of the Tabqa Dam in the western part of Raqqa province.
However, the agreements between official Damascus and the Kurds leave out the interests of American oil companies.
The Syrian government will need to come to an agreement with the local tribes. With their support, the chances of winning in northeast Syria are much higher. Perhaps there is a reason to allocate them a share of future oil revenues, and this will be a decisive argument in the negotiations.
There is another important reason for the United States to remain in the region, especially Deir ez-Zor. It is through Deir ez-Zor that the main routes connecting Iraq and Syria pass. Iran, in turn, is very interested in opening a corridor from Iraq to Syria. The United States, of course, cannot allow this to happen.
Here Israel will provide active assistance to the United States. Israeli Prime Minister Benjamin Netanyahu, commenting on the conclusion of an agreement on military cooperation between Syria and Iran, threatened to strike Syrian government facilities and Iranian facilities in Syria.
Thus, the main and most brutal battle on the territory of the Syrian Arab Republic is still ahead. A war is coming for oil resources in the northeast of the country.
The Syrian government, with the help of Moscow and Tehran, can solve this problem through internal Syrian dialogue, obtaining support from local tribes, and also subject to increased costs for the presence of the American military contingent and US allies in Syria through the organization of a broad guerrilla movement.
Before the outbreak of the civil war, Syria was not a very prominent player in the regional energy arena.
The country produced sufficient quantities of oil and gas to meet its own needs and export relatively small volumes of raw materials to neighboring countries.
The oil and gas complex of the SAR was an important basic sector of the economy, but it was not the only important sector.
Statistics of the Syrian oil complex
In 2009, Syria produced about 400 thousand barrels of oil per day. According to BP, in 2013, production figures in the republic decreased to 59 thousand barrels per day, and in 2014 to 33 thousand.
As of March 2016, oil production is estimated at 50-90 thousand barrels. oil per day, of which only 9 thousand barrels. falls on fields controlled by the forces of Bashar al-Assad.
Before the conflict, oil revenues accounted for 20% of government earnings. Oil accounted for 35% of exports in value terms.
Export supplies were interrupted after the European Union imposed sanctions against Syria, as well as after the Assad government began to lose control over the fields.
Syria's oil refining capacity in peacetime was capable of processing up to 240 thousand barrels. oil per day. This was not enough to meet domestic demand.
Until 2010, the country bought about 100 thousand barrels daily. petroleum products, and sold 36 thousand barrels to neighboring countries.
After the outbreak of the civil war and tightening international sanctions, the import of hydrocarbons was greatly complicated.
Iran became the main supplier of oil and petroleum products for the government of B. Assad; it supplied raw materials by tankers. According to some data, the volume of such supplies averaged 60 thousand barrels per day.
Oil fields and production
The Islamic State still controls most of Syria's hydrocarbons.
First of all, we are talking about the largest oil-bearing region in the country - Deir ez-Zor. The deposits in this area were previously developed by international giants Shell and Total.
A significant portion of Shell's assets belonged to its subsidiary Al-Furat Petroleum Company. The oil from these fields has a low sulfur content, which makes it relatively easy to process. You can even use homemade homemade equipment for this.
The “pearl” of the Syrian oil complex, the al-Omr field, is also under the control of the Islamists. Several months ago, it was attacked by an international coalition (or rather, by the British Air Force).
The field may still be operational, but it is reported that production from it is now possible at much lower levels than previously. The fact is that serious damage was caused to the infrastructure connecting the complex of wells.
In the same area of the Deir ez-Zor province, the Islamists hold the at-Tanak, Dhafra, al-Ward and some others fields.
In a recent study, the American business newspaper Financial Times (FT) published data on the prices that IS Islamists set for oil from various Syrian fields. Based on this information, one can come to a conclusion about which deposits the Islamists control and which of them are more profitable, which means they are in better condition and are capable of producing higher quality raw materials.
Source:Financial Times
In January 2016, information came that IS supporters had lost control of one of the fields in the province of Deir ez-Zor - al-Jabsa.
The object was recaptured by the People's Protection Units of the Syrian Kurds (supporters of the Democratic Union Party who are actively involved in the Syrian conflict). Al-Jabsa is not the largest oil field in the area, but it was the first IS loss in what is by far the most important oil-producing province of Syria.
In the territories controlled by B. Assad, oil production is 9 thousand barrels per day. This was recently announced by Oil Minister Suleiman al-Abbas. The government does not deny that to increase production it is necessary to liberate Syrian territories from terrorist organizations.
At the same time, according to the same representatives of the government of B. Assad, the drilling of new wells does not stop in some regions of the country. According to calculations by S. al-Abbas, their commissioning can add 8 thousand barrels per day.
The fields of the northeast of the SAR mainly came under the control of the Kurds. This applies to deposits in the area of Al-Hasakah (Jibsa, Batma, Kabiba, Guna, Huwayziya). All these fields produced no more than 10 thousand barrels in peacetime. oil per day.
According to some reports, the Kurds independently began producing and refining oil in these territories. The resulting products are sold on the local market.
Deposits in the Palmyra area alternately came under the control of different forces throughout the civil war. The area now appears to be dominated by government forces.
There is very little information about how the ATS pipeline system functions. Most likely this is due to the fact that oil pipelines have practically ceased to be used. Transportation of oil and petroleum products is mainly carried out by oil tanks.
In the summer of 2015, the government army announced the resumption of operation of the Syrian section of the Iraq-Syria oil pipeline. However, more detailed information has not been available since then. The Iraqi part of the oil pipeline has not been operating for several years.
Oil and gas pipelines ATS
Oil refining
Syria's main oil refining capacities are in the hands of IS. Some are controlled by other opposition groups, for example, Islamists of the Jabhat al-Nusra group banned in Russia. However, the latter’s infrastructure is capable of producing petroleum products of worse quality than IS produces.
Interestingly, according to the FT, citing statements by some Syrian oil traders, IS supporters acquired several refineries in the second half of 2015. This became necessary after international forces intensified attacks on their “old” factories.
The scheme for “acquiring” new refineries is as follows: representatives of the Islamic State take control of the refinery, ensure the supply of raw materials there, while the former head of the refinery remains in his position. Part of the resulting petroleum products (gasoline of various qualities and fuel oil) is transferred to the needs of the Islamic State, the rest is sold to intermediaries. Income from sold products is divided between the former owners of the refinery and ISIS.
In areas under the control of other groups in northwestern Syria, petroleum products processed at IS facilities or processed at local enterprises are sold.
Due to the already noted differences in quality, products “produced by ISIS” are more expensive. At the same time, the price of fuel oil and gasoline in areas under the control of other groups doubled after the intensification of strikes by international forces.
In areas under the government of B. Assad, oil refining is in better condition.
Despite the complexity of the economic situation in Syria, oil refineries in Homs and Baniyas are operating and are ready to produce more petroleum products than they can currently sell on the market (at least, this is what local authorities say). In this regard, the government entered into an agreement with two companies (their names are not mentioned) that will purchase refinery products during 2016. The volume of purchases is 2.5 million barrels. per month (approximately 83 thousand barrels/day).
Airstrikes by international forces
Due to the fact that the Syrian oil and gas complex is one of the main sources of income for terrorist groups participating in the Syrian conflict, it has become the target of attacks by both the US-led coalition and Russian aviation.
Below is a map where the targets of strikes by the Russian Aerospace Forces are marked in red, and the targets of strikes by the international coalition led by the United States are marked in blue.
Source:Financial Times
In early February, two IS oil and gas processing plants were destroyed in the Deir ez-Zor region. On February 22, an oil well in the same area was hit. Also, attacks on the oil infrastructure of Deir ez-Zor were actively carried out in early January 2016, December 2015 and earlier.
According to calculations by the Syrian Ministry of Energy, the country's oil and gas sector lost about $60 billion during the conflict.
According to the Syrian agency Sana, the Syrian government intends to demand compensation from the US-led coalition for damage caused to the country's oil and gas infrastructure.
For now, the government plans to seek compensation for the destruction of infrastructure in the Deir ez-Zor area, where oil refining and collection facilities, as well as other facilities of the complex built by Chinese companies, were blown up on December 18.
In addition, the government may demand payment for the destruction of the oil collection system at the al-Omr field; bombing of wells in the fields of al-Tanak, Jidu, Abu Hardan (wells 136, 120, 106 and 108), al-Maleh, al-Seyjan, al-Azraq, al-Jafra, al-Ward, at-Taym and al-Omr ( in the last two cases, the wells caught fire); destruction of eight pumping stations in the area of the al-Jafra field.
It is worth noting that the American coalition mainly focuses on the destruction of oil production and refining infrastructure, while the Russian Aerospace Forces more often reported attacks on oil tank columns and oil storage facilities.
ISIS oil business scheme
According to the editor-in-chief of the Syria Report magazine, Jahad Yazigi, one of the main tactics of the Islamic State when conducting the oil and gas business is to distance itself from the extracted and sold oil at the earliest stages of its sale. For this purpose, intermediaries play a particularly important role, buying hydrocarbons from IS already at the places of their production.
A large chain of such intermediaries makes it possible to formally refute the fact that other groups fighting the Islamic State (or countries, such as Turkey) purchase oil from the Islamists. IS does not enter into oil sales contracts. Everything is done through intermediaries who are always ready to buy hydrocarbons.
Business model for the sale of IS oil: Islamists control some oil production and oil refining infrastructure, they sell the products produced on it through resellers, from whom they also take taxes. It is likely that these taxes provide a large influx of financial resources for IS.
According to estimates by the US Treasury Department, IS earns up to $40 million a month from the sale of hydrocarbons.
At the same time, according to the editor-in-chief of the Syria Report, IS supporters not only sell raw materials to resellers, but also distribute them among local tribes in order to ensure their loyalty. Also, representatives of local tribes are allowed to “connect” to the extraction of resources from wells.
It is reported that at least nine major tribes were (and may still be) being fed by the Islamic State.
FT reports several areas where IS oil products are sold inside Syria:
- Manjib near the Turkish border northeast of Aleppo;
- Al-Bab near Aleppo;
- Al-Bariya and Zeban in Deir ez-Zor.
Oil refining, marketing and smuggling of oil by the Islamic State
According to the framework agreement on energy cooperation signed at the end of January, Russia will receive the exclusive right to produce gas and oil in Syria.
The agreement goes far beyond the scope of agreements describing the terms of cooperation in the field of repair and restoration of drilling rigs and production infrastructure. The Russians will also engage in training a new generation of Syrian oil sector employees and in energy consulting. Thanks to this step, Moscow will be able to strengthen its position in the Middle East.
Due to the ongoing war since 2011, the Syrian energy sector has fallen into disrepair. Local oil refineries require major modernization. Before the war, their capacity was 250 thousand barrels per day, but now it has been halved. As long as the embargo imposed by the EU remains in effect, we cannot count on support from European companies in Syria. Neither Brussels nor Washington will lift the ban on the import of Syrian hydrocarbons for political reasons: military operations that have been going on for more than six years have not led to a regime change; Bashar al-Assad, who is accused of using chemical weapons and other crimes, remains in power.
Russia, Iran and Syria
Countries that could help the Syrians rebuild their oil and gas sector are Russia and Iran. According to the agreements signed in September last year, Iranian companies were to be involved in the launch of Syrian oil refineries and the restoration of destroyed energy networks. The scope of work is very large: it will be necessary to launch new projects on land and at sea, and update outdated equipment. It should be taken into account that domestic demand for hydrocarbons will grow, since additional energy capacity will be needed to restore the war-torn economy. It is obvious that without outside help, Syria will not be able to quickly breathe new life into the mining sector.
Tehran was counting on the emergence of an Iran-Venezuela-Syria consortium that could put these plans into practice, but due to the serious economic problems that Caracas has faced, it will have to look for other solutions. At the moment, the Iranian Islamic Revolutionary Guard Corps has succeeded in achieving one of its goals - to take control of the Syrian telecommunications sector.
Russia, against which European and American sanctions continue to apply, is not afraid of restrictive measures: it has long learned to cope with them successfully. The steps the Kremlin is taking indicate that it intends to achieve a dominant position in this part of the world. His long-term strategy appears to include rebuilding the Syrian oil and gas sector.
In 2015, the International Monetary Fund assumed that $27 billion would have to be spent on this purpose, but, according to recent data, the figure has increased to 35–40 billion. This money will be needed to restore the entire infrastructure (pipelines, pumping stations, etc.), which can be restarted only after repairs have been carried out. For political reasons, the process will not affect the northern provinces occupied by Syrian Kurds, where large oil fields are located. The future of the deposits (including the largest, Al-Omar) in territories controlled by forces that are supported by the West, and not the Syrian army, also remains unclear.
Who will produce oil and gas in Syria?
It is still unknown which Russian company will be involved in the restoration of the Syrian energy sector. In the first four years of the war, Soyuzneftegaz worked in Syria, but in 2015 it decided to leave this country. Another candidate is Tatneft, which is developing oil and gas fields in Tatarstan. Syria was one of the first countries where this Russian company tried its hand at the international market, so when favorable conditions arise, it will want to return there. In addition, there are chances that state-owned giants such as Rosneft and Gazpromneft will decide to join their competitor.
In 2002, Syria produced 677 thousand barrels of oil per day. Before the start of the civil war, this figure was 380 thousand barrels, and now has fallen to a level of 14 - 15 thousand barrels. The decline in gas production was not as significant due to the important role that this raw material plays in the Syrian economy: 90% of the blue gold produced in the country is used to generate electricity. In the pre-war period, production volume reached 8 billion cubic meters per year, now it is 3.5 billion cubic meters.
Before the war, Syrian oil was mainly exported to Europe, this was facilitated by the country’s geographical location and the fact that the main players in this sector of the Syrian economy were European companies such as Shell and Total. As the European ban on Syrian oil supplies continues, the new owner of the production infrastructure will have to find new markets for Syrian hydrocarbons. In this context, it seems logical to focus on the countries of the region: Turkey or Lebanon.
From an economic point of view, it is more profitable for Russia to take control of gas fields. Gas is the main raw material for electricity production in Syria, which means that demand for it on the domestic market will remain stable. In addition, there is a high probability that there is a field on the Syrian continental shelf in the eastern Mediterranean Sea that is not inferior in terms of reserves to the Zohr, Leviathan and Aphrodite fields.
The goal is a dominant position in the region
Moscow is seeking to consolidate its position in South-West Asia. Rosneft and Gazpromneft are working in Iraqi Kurdistan, while Novatek is engaged in gas production in offshore fields in the eastern countries of the Mediterranean Sea. Oil and gas are not only energy resources. First of all, they are needed by the chemical industry for the production of ubiquitous plastics, lubricants, pesticides, drugs, as well as the production of a variety of substances necessary for the production of other materials and products, including chemical fertilizers. Modern man cannot imagine life without all this.
If Russia manages to take control of the Syrian fields, it will receive a non-military instrument of influence on international politics and will be able to more effectively influence OPEC. The Kremlin is ready to devote a lot of resources, both financial, intellectual and human, to satisfy its geopolitical ambitions.
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Russian oil companies have begun signing contracts to invest in oil and gas fields in Syria, and Stroytransgaz has signed an agreement to extract phosphates.
The conclusion of these deals became possible after the armed forces liberated territories under the control of the Islamic State ( prohibited in the Russian Federation - approx. ed.). The largest companies that signed contracts were the oil company Evro Polis and Stroytransgaz.
Contracts with the Syrian government represent an incentive for Russian companies and help stabilize the situation in Syria. On August 5, the director of the Center for Strategic Conjuncture, Ivan Konovalov, in an interview with the New York Times, said that the agreements were signed back in December, but this became known only now. He explained that if companies provide security, then the state must pay for this service, and it does not matter with what exactly. In the oil deal, the newly formed Evro Polis will receive a 25 percent share in the production of Syrian oil and gas, which will be produced in areas near Palmyra that have been liberated from Islamic State control.
Konovalov argues that the nature of these transactions dates back to the days of Francis Drake and Cecil Rhodes, two figures in British history who associated their lives with war and profit ( Francis Drake - English navigator, thanks to whom in the 16th century England carried out a number of successful operations on the territory of the Spanish colonies; Cecil Rhodes - one of the organizers of English colonial expansion in South Africa in the 19th century - approx. ed.).
The company works with a mysterious military company called Wagner, which the United States has sanctioned. As for the contract for investment in phosphate mining in central Syria, which was won by the Stroytransgaz company, in return the latter undertakes to ensure the protection of phosphate deposits. Most of the shares of this company belong to Gennady Timchenko, whose name is on the US sanctions list. He signed an agreement with the Syrian government to resume phosphate mining in eastern Syria mines.
Meanwhile, China is closely studying reports on the presence of oil in the Golan Heights, which is pushing the Chinese leadership to secure its status as a defender of peace in the problematic region and implement its “One Belt, One Road” initiative. China is looking for ways to establish stability in the region in order to promote its project and ensure continuity of energy supplies from the Middle East. As a result, Beijing is reported to be intensifying its efforts to resolve the Syrian crisis and the Palestinian-Israeli conflict. The country began to actively support the process of political settlement in Syria, putting forward the idea of a trilateral dialogue between China, Israel and the Palestinian authorities. In addition, China is promoting infrastructure projects in Syria, Jordan and Israel, for the implementation of which it is planned to bring 20 thousand workers.
China has become a player with a real interest in the Middle East. It is increasing resources to protect its portfolio of assets and its citizens. In July, the first group of Chinese troops was sent to a new naval base that had been built in Djibouti to increase Chinese participation in the peacekeeping force in South Sudan (China has a long history in a united and divided Sudan). Beijing also offered to provide eight thousand peacekeepers for a permanent presence in conflict regions and to join the UN force to monitor the cessation of hostilities in the Golan in the future.
Context
Will the world withstand the pressure of China?
Sankei Shimbun 07/29/2017Putin does not spare a single ruble on Syria
Cankao xiaoxi 08/08/2017Assad is in the trash heap, Russia is on the margins of history
Al Arab 08/16/2017How will Netanyahu thank Putin?
Al-Quds Al-Arabi 04/26/2016 In November 2015, the Israeli oil and gas company Afec Oil&Gas, a subsidiary of the American Genie Energy, discovered billions of barrels of oil reserves in the Golan Heights. The company's chief geologist, Yuval Bartov, said: "The thickness of the layers reaches 350 meters, which is ten times the average thickness of oil reservoirs in the world." Genie Energy was able to obtain mining licenses despite opposition from environmental and other groups. These organizations are concerned that drilling could pollute Lake Tiberias, one of Israel's main sources of drinking water. As a result, there is debate in Israel as to what is more important to the country: access to drinking water or energy production. In addition, the quality and cost of oil exploration and production are still unknown, and the project is expected to face legal obstacles.However, the biggest problem is sovereignty. Israel annexed large parts of the Golan Heights in 1981, but internationally the area is still considered illegally occupied Syrian territory. Even Israel acknowledged this when it offered to give up the Golan Heights, which it occupied in 1967, in exchange for a comprehensive peace agreement with Syria. However, it was not achieved under former President Hafez al-Assad, who was defeated on the shores of Lake Tiberias. Since the collapse of Syria in 2011 and discussions about partitioning areas that did not include the Golan Heights, Israel has opposed any deal and even demanded recognition of control over the 1,200 square kilometers occupied in the Golan. Israel intervened militarily in Syria in June as the Syrian army fired at opposition forces in the region. Israel backs a rebel group calling itself the Knights of the Golan and views it as a buffer force to keep the Syrian army and Iran-backed Hezbollah from opposing Israeli plans. These developments complicate Genie Energy's plans to exploit the natural resources of the Golan Heights.
There is another potential source of oil in Israel that is being explored by a Texas company called Zion Oil. This company has been drilling wells near Haifa since 2005, producing 484 million barrels of oil. In 2004, geologists confirmed the existence of oil and gas fields there. The company holds an exploration license for 40,000 hectares of land 42 kilometers south of Genie Energy's Golan discovery, in addition to the Leviathan and Tamar offshore gas fields. All this will make Israel an important source of energy in the future, not only in the region or in Europe, but also in Asian markets, for example in China and India. We witnessed the successful visit of Indian Prime Minister Modi to Israel and the signing of a number of bilateral agreements. In addition, we can see increased Chinese-Israeli cooperation.
On the other hand, regarding Syria and Israel, we can note that UN peacekeeping forces may be stationed in the Golan Heights, especially after Beijing sent 1,000 soldiers to Lebanon in 2006 at the request of Israel, which did not want Arab forces were on its border. India, South Korea and the Philippines also sent forces.
Therefore, China's interest in strengthening its presence in the UN peacekeeping force can serve as a confidence-building tool. Beijing also aims to become an effective buffer force between Israel and Syria in the Golan Heights thanks to good relations with both countries. This region could turn into a testing ground for establishing good relations between the United States and China in the Middle East. The general interest in working on new oil fields in the Golan Heights undoubtedly contributes to this.
As for Russian oil companies, the Syrian government is ready to enter into deals with them in the format of “security in exchange for the extraction of natural resources.” It is now known that Russia’s participation in the Middle Eastern wars was aimed, among other things, at obtaining contracts for oil production. As Russian companies begin to sign agreements and produce energy, Russia's goals are becoming clear. Beijing, as always, has not deviated from its strategy, building six industrial islands in China, forcing America to wake up and take control of the coastline. While other countries are at war, China is implementing economic and trade projects that employ thousands of Chinese workers.
Iran has already begun to suffer from their influx as a result of the implementation of the Chinese “Silk Road”. The smell of oil attracts many countries, forcing them to send peacekeeping forces to cover up oil deals, and Israel, in turn, wants to reach China through pipelines through the Mediterranean, Haifa and the Golan Heights.
InoSMI materials contain assessments exclusively of foreign media and do not reflect the position of the InoSMI editorial staff.
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