The ongoing hostilities between the Syrian government and the rebels have made it impossible for the nation’s oil and gas production to recover in the near term. Oil production in Syria has dropped drastically since March 2011 primarily due to the conflict and also due to the imposition of Western sanctions, which has led to loss of oil export revenues.
Even Syria’s natural gas production has been adversely affected, although not as significantly as oil, but dry gas production has declined by nearly 30 per cent compared with pre-conflict production levels.
Analysts estimate that Syria’s oil and gas production may take months even years to recover. Even when the fighting subsides, it would probably take a while for the Syrian domestic energy system to reach pre-conflict levels. Production and export of crude oil has fallen dramatically. Syria is also facing supply shortages for some refined products.
Syria’s proven oil reserves are estimated to stand at 2.5 billion bbl, larger than all of Syria’s neighbours except for Iraq.
During 2008-10 Syria’s oil production was more than 400,000 bpd. However, in January the country’s oil production was estimated at less than 25,000 bpd. In 2014, production also included production outside control of the Syrian government. In late 2013, the Syrian government lost control of nearly all of the nation’s key oil fields. Rebels had managed to seize control of Syria’s oil and gas resources.
Majority of the international oil firms involved in Syria’s energy sector have terminated operations. The oil companies currently operating in Syria are Hayan Petroleum and the Elba Petroleum Co. However, these firms are operating without their IOC partners. In December 2013, the Syrian government and the Russian company SoyuzNefeGaz signed a 25-year exploration agreement in Block 2 offshore.
Although the oil fields have escaped damage from the violence and clashes, oil production has been stopped because of insufficient export opportunities and limited refining capacity.
Syria is facing serious issues in importing petroleum products and is also experiencing shortage of heating oil and diesel fuel. The shortfalls are expected to continue.
Currently, Syrian refineries are being operated at reduced rates. Syria has refineries in Hams and Banias and the combined capacity of both the refineries has fallen to half of their pre-conflict production levels.
Plans to set up new refineries are either on hold or have been cancelled. For instance, the proposed 100,000 bpd facility at Abu Khashab was cancelled due to widespread anarchy in the country.
In 2012, Syria’s consumption of products was below 260,000bpd. Experts believe that consumption in 2013 will be even lower.
The Syrian government continues to subsidize domestic use of petroleum products. The government spent over $1 billion on petroleum subsidies in the first half of 2013.
Thus, the future of Syrian energy sector appears rather bleak at the moment.
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