Russia Is Taking Over Syria’s Oil And Gas

Submitted by Viktor Katona of OilPrice

If finally happened…

In accordance with an energy cooperation framework agreement signed in late January, Russia will have exclusive rights to produce oil and gas in Syria.

The agreement goes significantly beyond that, stipulating the modalities of the rehabilitation of damaged rigs and infrastructure, energy advisory support, and training a new generation of Syrian oilmen. Still, the main international aspect and the key piece of this move is the final and unconditional consolidation of Russian interests in the Middle East.

Before the onset of the blood-drenched Civil War, Syrian oil production wavered around 380,000 barrels per day. It has declined for some time then, since its all-time peak production rate of 677,000 barrels per day in 2002. Although the Islamic State was allegedly driven underground, the current output still stands at a devastating 14–15,000 barrels per day.

As for gas, the production decline proved to be lower (it fell from 8 BCm/year to 3.5 BCm/year) due to its greater significance within the domestic economy. 90 percent of the produced gas in Syria was used for electricity production (as opposed to oil, which was either refined domestically or exported), and in view of this, the government took extra care to retake gas fields first as the prospects of reconquest became viable enough.

It’s an understatement to say that whoever takes over Syria’s energy sector will receive a desolate ruin. The country’s refineries need thorough reconstruction after their throughput capacity has halved from the pre-war level of 250,000 barrels per day. This task will most likely be carried out by Iranian companies, in accordance with agreements signed in September last year, which also involved the reconstruction of Syria’s damaged power grid. However, it remains unclear whether this project will go through, as Tehran counted upon an Iran-Venezuela-Syria consortium, which is all but feasible now against the background of Venezuela disintegrating, a new solution ought to be found. In any case, Tehran already got what it wanted in Syria as Iran’s Revolutionary Guard already secured the telecommunications sector.

Russia isn’t the only country that could have helped Syria to rebuild its oil and gas sector — as stated above, Iran could also lend a hand. However, Iran lacks the funds to invest heavily in Syria’s infrastructure — it needs foreign assistance to kickstart new projects at home aggravated by aging infrastructure and rapidly increasing demand. European companies are unlikely to get interested in Syria unless the EU embargo is lifted (in effect until June 1, 2018). Since the end of largescale military operations in Syria did not bring about a change of regime and Bashar al-Assad remains president of Syria, it would be surprising for Brussels not to prolong the sanctions regime (the U.S. will do it without a moment’s hesitation).

Most of Syrian export-bound oil was destined to Europe, partly because of its geographic vicinity, and partly because European companies Shell and Total (NYSE:TOT) were the largest shareholders in the sector. This is no longer possible as long as the EU ban on Syrian oil exports stays in place. Thus, the new owner would have to find new market outlets, either by relying on adjacent countries like Turkey or Lebanon, or by finding buyers in Asia.

Interestingly, there has been little to no discussion so far on which company will have to take up the uneasy job of bringing Syria’s energy sector back to life. Throughout the war years, only the minuscule Soyuzneftegaz ventured into Syria (eventually relinquishing its prospects in 2015). Tatneft, a state-owned enterprise that develops Tatarstan’s oil and gas fields, is an obvious candidate since Syria (along with Libya, to their detriment) was their first attempt to internationalize their activities. Just as it girded itself for the commissioning of the Qishma oil field, full-scale war broke out and the company was forced to abandon it. Tatneft, Russia’s fifth-largest producer, is interested in returning to Syria once conditions allow for it. Beyond that, it’s still unclear if state majors (Rosneft, Gazprom Neft) would want to join in.

Taking control of gas fields seems a better (and more profitable) bet for Russia. If it manages to secure a fixed price, stable demand is guaranteed domestically, as gas will remain the dominant electricity generation input. Moreover, the continental shelf of the Eastern Mediterranean has yielded the likes of the Zohr, Leviathan and Aphrodite. Lebanon, whose sweetest spots are in-between Zohr and Leviathan, is also inching closer to tap into its assumed gas bounties.

Sanctions-wise, Moscow is unafraid of any consequences for it is already under European and U.S. sanctions. With a long-range goal in mind, it could even assent to the significant cost of rebuilding Syria’s oil and gas sector — IMF put the expenses at $27 billion in 2015 but the current estimate lies most likely between $35–40 billion. This includes the totality of rigs, pipelines, pumping stations etc. to be repaired and put back into operation. In some areas, for instance, in the predominantly Kurdish-populated northern provinces with its heavy oil deposits, it’s unlikely to seize the opportunity. Moreover, it remains unclear what will happen to the fields (including Syria’s largest oil field, Al Omar) that were retaken by Western-backed militias, not the Syrian army. 

Unfortunately for Royal Dutch Shell (NYSE:RDS-A) which was forced to let go of the 100 kbpd Al Omar field because of the stringent sanctions regime, Damascus seems intent on consolidating the energy sector under the guidance of the national oil company, SPC. By means of political hand-wringing and the extension of Kurdish political rights within a united Syria, this goal can be achieved; however, the issue of selling the oil is just as acute as is its production.

Syria’s offshore potential is still shrouded in mystery, despite some seismic survey in late 2000s, most of the times one just hears allusions that it is as prolific as that of Israel, Egypt or Cyprus. An early USGS estimate put Syria’s potential offshore gas reserves at 24 TCf (700 BCm), more than double of its onshore gas, while its oil reserves at a “mere” 50 million tons, a sixth of its onshore oil reserves.

Syria’s proven reserves of 2.5 bln barrels (341 million tons) of oil and 10.1 TCf (285 BCm) of gas might seem meager compared to those of neighboring Iraq or allied Iran. Taking into consideration that one-third of its reserves are very heavy, viscous crudes, Damascus will have to sweeten the deal to bring in big Russian names — companies that can genuinely make an impact and not just take a chance. But geopolitically, it might be a wise move.

Russia has been keen on increasing its foothold in Iraqi Kurdistan (Rosneft, Gazprom Neft), tapping into Lebanon’s offshore gas (NOVATEK, and having a bigger say in Eastern Mediterranean affairs in general. For that, taking over Syria’s oil and gas sector might be a very powerful, non-military, tool.


Jung ciscokid Fri, 02/16/2018 - 03:44 Permalink

Indeed, but it is excellent news, although they probably cannot get hold of the stolen Golan with its oil, as once Israel steals it holds on (to the pleasure of the Genie Company with Dick Cheney and his mates as shareholders).

China will help rebuild Syria form the destruction by the US and its great friend Saudi Arabia. Perhaps Syria can escape complete destruction which was part of the program of the NWO/Zionists guys (with Israel in the front row)?

In reply to by ciscokid

Ecclesia Militans 07564111 Fri, 02/16/2018 - 05:20 Permalink

This is the best possible outcome for Israel, Syria, and the US.

Israel will get a stabilized friendly neighbor for the first time in its history.  Remember that Israel is aspiring to export gas to Europe through Greece and Cyprus via an underground pipeline from identified fields offshore - this activity will only accelerate once Russia stabilizes Syria and its new ethnic enclaves.  How many times has Bibi met with Russian diplomats in the past year?

Russia provides the bulwark between Iran and the West, and effectively shuts the Iranians out of oil & gas development in the Levant.  Spare me the talk of telecommunications infrastructure rehabilitation: I've seen that firsthand in Libya and that is just small beer compared to energy.

The US actually benefits from the non Houston-driven US policy dripped out by the Obama administration in its ineptitude.  Russia is a far better actor than Iran and as Iraq has proven, simply pushing oil into the markets from a nascent source (like the Basra region of Iraq which saw no significant capital investment from the outset of the Iran-Iraq War in 1979 through to KBR's RIO program to recover Iraqi Oil in 2003) these nation-states do not maintain any loyalties short of those forced upon them by military presence.  With Russia assuming this role in Syria now and moving forward, the US is able to avoid another Iraq-style fiasco while having a reliable partner in Russia.  After all, didn't Johnson back-channel US willingness to Brezhnev for Russia up-arming the Egyptians in 1967 to prevent a complete military catastrophe during that Arab-Israeli conflict?

This is a win-win-win for everyone except Iran.  

In reply to by 07564111

Socratic Dog Ecclesia Militans Fri, 02/16/2018 - 10:52 Permalink

Trouble is, when you bring a tasty morsel to a Mad Dog, it's probably going to bite your arm off.

Israel and the Declining Empire are the mad dogs over there.  A sensible man would look at the picture you paint and think yes, that sounds good.  Mad dogs are not Sensible Men.

Also, it's giving away ownership and/or control of ME oil, or some of it.  You think the mad dogs will go with that?  They've been killing and slaughtering over a hundred years to keep it... and now they'll just give it away?

In reply to by Ecclesia Militans

Mustafa Kemal Ecclesia Militans Fri, 02/16/2018 - 11:22 Permalink

"This is the best possible outcome for Israel, Syria, and the US."

You are thinking of dollars.

However, on the war front, this is really bad news for all the AmeriZionists and their plans for destabilization of the region. Now, not only is Russia and Iran formally invited to participate in the defense of Syria,  they now have a vested interest as part owners. So attacking Syria now implies attacking Russia

Neocons, not only is our dollar sinking, but out warmongering is being seriously challenged (through cooperation BTW)

In reply to by Ecclesia Militans

BobEore 07564111 Fri, 02/16/2018 - 08:13 Permalink

he he heh.

Bibi... aka, the guy who signs your paycheck, Mr Russo-talmudist troll

has masterfully arranged the pieces by which this mother of all psyops proceeds. And getting you to push the 'zionists are losing' meme here is a small part of that same psyop.

Ultimately though, as your phony narrative falls apart - due to continued dosage of the real story in appropriate amounts,

the world will realize that the Syrian Endgame has played out according to a 'Byzantine Script' that only a journo dedicated to truth in media could have figured out beforehand.

"whereby the conclusion of the phony wars in Iraq and Syria can be brought about once the petroleum assets it seeks are safely sequestered, and the affected states sufficiently neutered"...

there has to be a grand finale of much bloodshed - to the north, between their puppet proxy Turkey, and the Kurdish Cantons - to the east, between the Americans and Syrians, with some Russians thrown in for good measure, to increase the geopolitical stakes!

And then... like all the rest of the lil helpers...

your time for 'under the bus' will come up too!


In reply to by 07564111

HisBoyElroy Malaka Fri, 02/16/2018 - 09:11 Permalink           


Take a a look at these kids.... we all knew them in high school. Hell probably most of  the ZH posters looked like these guys in high school. We all knew who the crazies were, just avoid them if at all possible. 

Maybe channel these nuts into the transgender movement, safely direct the crazy into a harmless pursuit. 


In reply to by Malaka

BobEore khnum Fri, 02/16/2018 - 08:31 Permalink

Weighted down - beset - shall we say? ... by the Jinn like bad spirits of the talmudic mafiyas fake storylines,

our gaggle of ghoulish ZHombies put on their tattered rags and trot out dutifully, if lumberingly, to cheerlead their team on again today!

"GENEL energy" is no 'genie' ... in a bottle or otherwise, but as wise ones realize, an energy play which executes the tiny terrorist state in the s e Med's VISION of a grand EURASIAN energy cartel. Former BP Floridas most wanted man Tony Hayward... Natty Rotter... some very bad Turkish dervishes - and a bunch of former Goldman and Morgan guys raised the capital with which to begin buying into Iraqi fields and muscling out legit players...

now, in tandem with (not so)secret partner Rosneft and Gazprom having sequestered all of that countries northern fields for themselves exclusively, are moving in to divide up those of Syria. Combined with their offshore fields in the med(also a jv with the Russo part of the russo-talmudic mafiyas behind this whole deal)and junior partners like Iran, Gulf States, Azerbaijan, etc.,

once they wrap up the Syrian Endgame... its on to strangling Europe... eliminating NATO... and watching in glee as the formerly might Republic destroys itself as instructed.


No Genius... of the talmudic kabbalist kind.

Hurrah! they said. All hail our new masters!


In reply to by khnum

William Dorritt Jung Fri, 02/16/2018 - 08:51 Permalink

If Syria is smart they will keep Iran and China out.


A lot of the coast of Syria looks like prime beach resorts waiting to happen which creates millions of service sector job.

Bombed out Antiquities should be fully restored and land around them turned into parks, bus parking and large squares for the restaurants and shops, again millions of jobs and a middle class merchant community.

Build from there.

In reply to by Jung

giovanni_f ciscokid Fri, 02/16/2018 - 03:46 Permalink

I am not atrociously surprised that no companies have been invited to help clear up the mess that are from countries that contributed or conspired to destroy Syria.

And the Russians won't insist on having IMF parasites implanted directly in the government building like in Ecuador when the US was still calling the shots there.

In reply to by ciscokid

PrivetHedge giovanni_f Fri, 02/16/2018 - 05:15 Permalink

I suspect Syria and Russia will be inviting the one friendly country who can build lots of stuff very fast and at very good prices: China, to help the rebuilding.

Syria, Russia, Hezbollah, Iran, Iraq, Turkey, China are the future, Israel is being contained by Russian and Iranian tech to it's own apartheid padded cell where they'll just have to be content to torture thousands of Palestinians every month like normal.

Meanwhile the US will drown in debt because its always been Expendable.

In reply to by giovanni_f

Ecclesia Militans PrivetHedge Fri, 02/16/2018 - 05:38 Permalink

I disagree about China - I was in Afghanistan when they signed the deal with Karzai's government to develop Aynak and then cited security instability for delaying the purported rail line they were going to construct.  China has no appetite for managing risk on any level aside from its own cowering population.

Russian equipment is as good (if not better) and equally cheap.  The Arabs respect Russians (as do the Afghans, much to everyone's surprise after the events of 35 years ago) and thanks to the current Assad's father there is likely a large portion of Syria's current population who can directly recall the cultural and civil impact of Soviet-Russian influence (which they likely recall with fondness.)

China is struggling to get an ROI out of all their efforts in Africa (where they are getting raped by Indian and Lebanese companies who can actually function on the ground.)  China has at least a solid generation to figure out how to actually play proxy power which is why OBOR is proceeding so swiftly; the governments in the 'Stans are giddy at Chinese investment with a lack of enforcement strings attached.

In reply to by PrivetHedge

William Dorritt Ecclesia Militans Fri, 02/16/2018 - 08:56 Permalink

China spent $150 billion to turn Venezuela into a shit hole.

Likely we will find that China has spent tens of Billions with the ANC to turn SA into a shit hole.

Iran is led by fanatics, without Obama they would be out of cash

Zero debt, internally owned Russia is in great shape compared to most of the world and has a long term relationship with Syria.

In reply to by Ecclesia Militans

BobEore ciscokid Fri, 02/16/2018 - 04:01 Permalink

Many a slip tween cup and lip, as Moscow found out last week when its battalion-strength 'pointed invitation' to SDF forces(with embedded US special forces elements)came acropper in the sands of eastern Syria. Holding Omar and the Cominco gas fields appears to be the American game plan - one which, if doable, would make of this article but another wrinkled edition of 'yesterdays' fake news.'

But... as usual - a wrinkle in the works... all by design! As postulated in the dispatch of Feb 10th, the downed Sraeli jet was

" The Sraelis choose to claim an 'Iranian  drone' took their plane down. It's almost enough to start a shooting war. But not quite enough.

Watch... as something now happens whereby the Russians will be irretrievably dragged into this dark side theater...

a piece of oil-soaked rag which still required a match to light -it. One conveniently struck next day with the clash between American gunships and Russian(not "Russian-backed pls note!)'contractors' - which the ONEMEDIA would  get around to reporting 48 hrs later.  With that part of the script out of the way, the action would move back to the north... and the pending confrontation tween jihadist Ankara and the US troops near Manbij.

" Why would a deliberately confrontational stance be chosen as the best way to deal with the very blustery and polemic noise from Ankara? Especially after the performance of the TSK against a rag tag bunch of militia in Afrin has once again demonstrated that entities decline in capability to the level of farce?"

But now, with the Kurds of the SDF piling back north to join the fight for Afrin... the eastern fields are again - up for grabs.

Couldn't get any messier - or could it?

" We return to the precis as offered up here: these staged confrontations and deliberate provocations happening on many fronts now in Syria are a lead up to the theatrical production which only one player is capable of organizing – and pulling off! Do you still somehow doubt that Israel has the desire to make of Syria a flash point where white on white – America and Russia – blood begins to spill in unison with the brown on brown which has been a central focus of its foreign policy adventures for decades now? Even when it has been explained over and over again that the powerful Chabad ‘advisors’ behind the thrones of both powers are capable of guiding those countries into such a disaster? Fine. Then just watch."SYRIAN ENDGAME: Initial Assessment of the opening events - Part Three

In reply to by ciscokid

Sandmann Fri, 02/16/2018 - 03:35 Permalink

China might wish to have an Oil Marketing Company operating from Greece and source oil through whatever channels it chooses. Israel was always keen to buy stolen Iraqi and Syrian oil but probably has ideological issues with paying the rightful owner