The U.S. oil company ConocoPhillips has reached an agreement with the Syrian state oil company Syrian Petroleum Company for natural gas extraction in Syria and the search for new deposits. When the contract is signed, probably this week, it will be the first between an American oil major and the new Syrian government, led by President Ahmed al-Sharaa, a former Islamic terrorist.
SYRIA’S OIL AND GAS POTENTIAL IS IN THE OFFSHORE
Syria believes it needs foreign energy companies to develop its oil & gas industry after more than ten years of civil war, also because it lacks technical expertise in deepwater exploration operations (offshore, in jargon).
According to consulting firm Wood Mackenzie, Syria has oil and gas reserves of at least 1.3 billion barrels. The greatest potential is precisely the offshore area, which has never been explored.
THE ELECTRICITY DEMAND
In 2011, before the start of the civil war, Syria produced 30 million cubic meters of gas per day; since then, however, output has decreased by two-thirds. According to estimates from the Damascus government, the agreement with ConocoPhillips – a memorandum of understanding was signed last November – will ensure a growth in national gas production of about 4-5 million cubic meters per day within a year.
This would be a significant increase, considering that today Syria depends on energy imports from Azerbaijan and Qatar and struggles to power its electrical grid: blackouts are therefore frequent, although the situation is improving. According to estimates, the country needs approximately 18 million cubic meters of gas per day for electricity generation: currently, electricity is available for thirteen hours out of twenty-four, but until recently access was guaranteed for only two hours per day.
AL-SHARAA’S PLAN
Although Syria’s hydrocarbon reserves are relatively modest compared to those of other countries in the region, their exploitation is still important for the government, which needs revenue to revive the economy and infrastructure. This is why President al-Sharaa’s foreign policy – who succeeded Bashar al-Assad’s regime – is strongly oriented towards attracting foreign investments in the oil industry.
In this regard, al-Sharaa has managed to leverage to his advantage the energy dominance vision of American President Donald Trump, who last year suspended most sanctions on Syria, thus opening new opportunities for U.S. energy companies. Not only that: al-Sharaa has also tried to capitalize on the war against Iran, proposing Syria as an alternative corridor to the Strait of Hormuz for crude oil transportation.
WHAT ENI, CHEVRON, AND TOTAL WILL DO
Besides ConocoPhillips, in February the CEO of the Syrian Petroleum Company had revealed Syria’s intention to grant exploration licenses also to other foreign energy companies, including the Italian Eni, the French TotalEnergies, and the American Chevron.
