Middle East: Syria

MIDDLE EAST

Dr. A. F. Alhajji, Contributing Editor

Syria

The death of Hafez Al-Assad, the election of his son and the rebuilding of Syria’s economy may take its toll on the country’s oil industry this year. However, optimists believe that the situation will change once the new president, Bashar Al-Assad, takes office. They believe that new foreign investment laws will help attract foreign oil companies to rebuild Syria’s deteriorating oil sector. Crude production has been declining at a 6% rate during the last few years after peaking in 1996 at 612,000 bpd.

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Exploration. No major oil discoveries have been made in Syria for the last few years. However, most of the small-to-medium-sized discoveries made in 1999 were natural gas fields.

A new agreement was reached between the government and Tanganyika Oil last May. The agreement grants Tanganyika exclusive rights to the Oude Development Block in northeastern Syria. Initial estimates indicate that the tract may contain more than 2 billion bbl of oil and 700 Bcf of natural gas. The project’s initial phase includes feasibility studies and pilot tests to determine optimal drilling technology and enhanced recovery schemes. The agreement reflects a new attitude in Syria toward foreign investment, because it is the first exclusive concession given to a foreign oil company that includes property owned by the Syrian Petroleum Co. (SPC).

Drilling/development. The estimated number of wells drilled was nearly unchanged during the past year and is expected to remain about the same this year. Recent reports indicate that TotalFinaElf is negotiating with the government to develop an oil field in northeastern Syria, to increase its output to 150,000 bpd from 85,000 bpd.

SPC announced plans last August to start producing oil from the Kishma East concession that was relinquished by Ireland’s Tullow Oil in 1997. According to the plan, the field will produce 5,000 bopd and 7.1 MMcfd of associated gas.

After winning a $430-million contract to develop gas facilities in eastern Syria, Conoco and TotalFinaElf awarded a $160-million contract last March to Kvaerner, to plan and build a natural gas processing center for a gas recovery project. The plant will be able to process 450 MMcfgd, once it is completed in 2001. This project involves capturing gas produced in 22 oil fields, with an estimated output of 280 MMcfgd.

Another plan includes the development of several gas fields north of Palmyra. It has been estimated that these fields will produce 200 MMcfgd, once it is completed after three years.

Production. Syria’s oil production declined in 1999, to 538,000 bpd from 550,000 bpd. It declined even further this year, to 530,000 bopd. Given the current situation in the oil fields and a lack of foreign investment, production is expected to decline even further in the future.

Last January, Syria inaugurated the expansion of Jpeisa gas plant which almost doubled its capacity. This project, along with others, will raise Syria’s natural gas production capacity to approximately 700 mcf/d.

Syria’s oil reserves are estimated at 2.3 billion bbl. Gas reserves are estimated at 8.4 Tcf, of which 54% is associated gas. While experts believe that the country’s reserves will last about 10 years, Syria’s oil minister, Muhammad Maher Jamal, indicated last year that oil production will continue until 2040.