Syria was previously the eastern Mediterranean's leading oil and natural gas producer, however, with Syria’s oil and natural gas production declining since 2011, a report from the US Energy Information Administration (EIA) states that the country’s energy sector is ‘in turmoil.’ According to the EIA, this is due to the ongoing civil conflict that began in spring of 2011.
Summary of key points
The report highlights that Syria's energy sector has faced numerous challenges as a result of conflict and subsequent sanctions imposed by the US and the EU. Damage to energy infrastructure, including oil and natural gas pipelines and electricity transmission networks, hindered the exploration, development, production, and transport of the Syria’s energy resources.
Syria has seen production fall dramatically, to a minor sum in comparison to pre-conflict levels. Syria is no longer able to export oil and, as a result, government revenues from the energy sector have fallen significantly.
Co-ordinating the efforts of the state-led companies
In 1964, Syria limited licenses for exploration and investment to the Syrian government. Therefore, the Ministry of Petroleum and Mineral Resources oversees the Syrian oil and natural gas sectors and is in charge of setting policy priorities and co-ordinating the efforts of the state-led companies that operate in the sector.
Petroleum and other liquids
According to the EIA, ‘Syria's oil sector has been in a state of disarray since 2011.’ Production and exports of crude oil have fallen close to zero and the country is facing supply shortages of refined products.
The report cites sources that estimated Syria's proved reserves of oil to be at 2.5 billion bbls as of January 2015. Most of Syria's crude oil has a low gravity and high sulphur content, requiring a specific configuration of refineries for processing. In the past, EU countries have accounted for the majority, of Syrian oil exports, totalling approximately US$3 billion, according to the European Commission. However, the EU has introduced new sanctions, which have resulted in a limited the number of markets to import and process the heavier Syrian crudes.
Impact of ISIS
Since the swift advance of ISIS in 2014, Syrian oil production has almost ceased. The country's two main refineries now operate at less than half of normal capacity, resulting in supply shortages for refined petroleum products. It is, therefore, likely that Iran will continue to supply Syria with crude oil and refined products. Oil theft is also a problem – Syrian officials claim that hundreds of barrels of crude oil are being stolen and shipped to neighbouring countries each day.
Syria's oil production averaged over 400 000 bpd between 2008 and 2010, a figure which, according to EIA predictions, dropped to less than 25 000 bpd in May 2015. Almost all of the international and national oil companies have ceased operations in Syria, significantly limiting their exploration and production capabilities. Moreover, Syria's largest producing fields, including Omar, has fallen to ISIS. The exact level of production from these fields is unknown, however, airstrikes have certainly caused structural damage, thus limiting their output.
Syria has an estimated 50 billion t of shale oil resources, according to Syrian government sources in 2010. In November 2011, Syrian government delayed bidding for these shale resources due to its political situation.
Imports and exports of petroleum and other liquids
Syria's crude oil exports are assumed to have ceased and the country is having difficulties importing refined petroleum products.
In the years leading up to 2011, Syria began importing more refined petroleum products to meet rising domestic demand. In 2010, the country imported an average of 105 000 bpd of refined petroleum products and exported just 36 000 bpd. At the time, Syria was also exporting more than 150 000 bpd of crude oil, but the country's crude exports are now effectively zero. Following the imposition of sanctions from other countries and the advancement of ISIS, Syria has experienced a shortage of crude oil and petroleum products. Iran continues to supply Syria with approximately 60 000 bpd of crude oil but this level is still insufficient to meet demand.
Refining and consumption of petroleum and other liquids
Syria has two state-owned refineries – one in Homs and the other in Banias. The combined nameplate capacity of the two refineries at the beginning of 2015 was slightly less than 240 000 bpd, a total capacity that met only thee quaters of Syria's pre-conflict demand for refined products. With damage to pipelines and other infrastructure around the refineries, and at Homs in particular, the total combined capacity of Syria's two refineries has fallen to roughly half of its pre-conflict output.
Syria's natural gas sector has not been affected quite as severely by its political conflict as the oil sector. According to sources Syria held proved reserves of 8.5 trillion ft3 of natural gas, as of January 2015. The majority of Syria's natural gas fields are in the central and eastern parts of the country and the majority of its natural gas is used by commercial and residential customers and in power generation.
In 2008, Syria became a net importer of natural gas, however, the current state of conflict has affected Syria’s ability to receive natural gas. The only source of natural gas imports, the Arab Gas Pipeline, became the target of attacks as the conflict intensified, forcing the pipeline to shut down. The country plans to convert all existing thermal power generation facilities to natural gas.
Exploration and production of natural gas
In 2010, the last year under normal operating conditions, Syria produced 316 billion ft3 of dry natural gas, however, that figure had dropped by 28% to approximately 227 billion ft3 in 2012. The US EIA estimates that production was 187 billion ft3 in 2013.
Moreover, in 2012, 25% of Syrian natural gas production was reinjected into the country's oilfields to aid in oil recovery, a slight increase from the 2002-11 average of nearly 19%. According to Syrian government officials, in 2013 more than 90% of the country's natural gas production was used by the its power sector.
Imports and exports of natural gas
Syria has never produced sufficient volumes of natural gas to export. Prior to the conflict, Syria imported a small amount of natural gas from Egypt to supplement its own domestic production, yet, production volumes dropped by more than 60% between 2010 and 2011. The imports came from Egypt via the Arab Gas Pipeline, which began its operation, to sends gas into Syria, in 2008. There were plans to expand the pipeline into Turkey, Lebanon, and eventually to Europe, but developments are now unlikely.
Adapted from press release by Cecilia Rehn