Russia Is Taking Over Syria’s Oil And Gas

[Independent voter]

I thought Putin was helping Assad out of the kindness of his heart. I am so disappointed.

I wonder what effect the US becoming the No. 1 producer of oil in the world will have on prices?





https://oilprice.com/Energy/Energy-G...l-And-Gas.html

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.
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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).

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.

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.

Related: Saudi Arabia Vows To Cut More Production To Stabilize Oil Market

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.

By Viktor Katona for Oilprice.com

[Deleted]

Sanctions-wise, Moscow is unafraid of any consequences for it is already under European and U.S. sanctions.

This part is especially funny.

The west "over-punished" Russia to a point where they don't care anymore and just do whatever they want.

[zorkuus]

This part is especially funny.

The west "over-punished" Russia to a point where they don't care anymore and just do whatever they want.

There's no over-punishing them. They're assholes and deserve every bit of it (and more).

[Deleted]

There's no over-punishing them. They're assholes and deserve every bit of it (and more).

You should always let them have something of value which they can still lose, so they will actually fear losing that and take that into consideration whenever they try to pull one of their stunts.

[Deleted]

Seems like Russia becomes USA 2.0, the world needs to do something against those 2 countries trying to exploit the world.

[Skroe]

This part is especially funny.

The west "over-punished" Russia to a point where they don't care anymore and just do whatever they want.

That's fine. And now we basically don't care anymore either. And there are now 200 dead Russian mercenaries to prove it.

Let's call it a downpayment on slapping down Russian adventurism.

Russia doesn't have the resources to sustain a Western pushback.

[Deleted]

That's fine. And now we basically don't care anymore either. And there are now 200 dead Russian mercenaries to prove it.

Let's call it a downpayment on slapping down Russian adventurism.

Russia doesn't have the resources to sustain a Western pushback.

Russians got killed in Vietnam too. No one cares about mercenaries.

[dlhak]

Good !

Now where were your worries when Iraq"s oil was taken over by the US ?

[Skroe]

You should always let them have something of value which they can still lose, so they will actually fear losing that and take that into consideration whenever they try to pull one of their stunts.

I mean, I'm not sure if you've seen the US defense budget for 2018/2019 announced last week and the Nuclear Posture Review that was just announced.

The US is taking away Russia's security in a very fundamental way. It'll take decades for them to reverse what has happened. And this time we won't rely on Russia's good word (because it has none) that it is complying.

Russia over the next few years will become fundamentally less secure and less safe for every Russian citizen because of a series of events that began with Russia's cheating on the INF Treaty, continued through Ukraine/Crimea, accelerated through Syria and culminated with their attack on the United States in 2016.

This is nothing less than a strategic disaster for Russia. They get their lolz out of mischief they engage in, then it blows up in their face. And that is why Russia is Russia.

[Skroe]

Russians got killed in Vietnam too. No one cares about mercenaries.

Not like this. This is quite different and your 50 year old comparison is flat out wrong.

http://www.thedrive.com/the-war-zone...orces-in-syria
These Russians are the same proxy force that the Kremlin has do their dirty work in Ukraine and other frozen conflicts. They're Russia's plausible deniability people.

And the US just sent 200 experienced Russian fighters straight to hell.

Expect a lot more of this. It's in the US interests to send a message to Russian mercenaries - take off that Russian uniform, and you're a target.

[Deleted]

Not like this. This is quite different and your 50 year old comparison is flat out wrong.

http://www.thedrive.com/the-war-zone...orces-in-syria
These Russians are the same proxy force that the Kremlin has do their dirty work in Ukraine and other frozen conflicts. They're Russia's plausible deniability people.

And the US just sent 200 experienced Russian fighters straight to hell.

Expect a lot more of this. It's in the US interests to send a message to Russian mercenaries - take off that Russian uniform, and you're a target.

I like how the US is taking action, they are finally going down a path of strength under Trump that's for sure.

But Syria is also 100% different from Ukraine. The Syrian president asked for Russia to intervene, it's the West that is over there uninvited.
We should really pull out completely now that IS is pretty much beaten and let the countries in the region (which Russia also is) take it over now.

No one had the balls to attack the "unmarked" Russians in the Krik/Ukraine, where it actually wouldve been warranted because half of Europe wouldve been wiped of the map soon after.

[Skroe]

Seems like Russia becomes USA 2.0, the world needs to do something against those 2 countries trying to exploit the world.

Oh sweet summer child. Meanwhile on the other side of the planet, China arms itself to prepare to join the great game.

This is the way non-unipolar worlds work. When the world is bipolar, multipolar or nonpolar, there are those countries with the power to expand their interests, and those countries that are caught in the middle. That has been the way before America or Russia existed. There is precisely nothing new about this.

Suddenly the now passed American unipolar moment doesn't look so bad, now does it?

I regret to inform you Lei Shi, this is going to get a whole lot worse. We haven't even seen the Chinese analog of the "Invasion of Panama", when, in years ahead, they take their mondernized military out for a little live fire field trip. We haven't seen Russia stage a norm-breaking nuclear test, which it will almost certainly do in the next decade to test its new warhead design. We haven't seen the US put nuclear missiles back in Europe (specifically Germany), which per the Nuclear Posture Review, is coming in one form or another in the 2020s.

The run up to Cold War II between the US and China is going to be nasty as Russia continues its decline.

[Dextroden]

That's fine. And now we basically don't care anymore either. And there are now 200 dead Russian mercenaries to prove it.

Let's call it a downpayment on slapping down Russian adventurism.

Russia doesn't have the resources to sustain a Western pushback.

Remember folks. This gentlemen claims he has zero interest in a war with Russia.

While orgasming because some died.

[Skroe]

I like how the US is taking action, they are finally going down a path of strength under Trump that's for sure.

Trump had nothing to do with this.

But Syria is also 100% different from Ukraine. The Syrian president asked for Russia to intervene, it's the West that is over there uninvited.
We should really pull out completely now that IS is pretty much beaten and let the countries in the region (which Russia also is) take it over now.

The Syrian government is not the legitimate representative of the Syrian people. That is the Western position.

Secondly, Syria was always, first and foremost, a proxy war between the US and Russia. ISIS was secondary. The US has been seeking to curtail Russian access to the Mediterranean for years and rob Russia of it's only Middle Eastern ally.

The US should continue to enable as much chaos as possible in Syria and make it as expensive as possible for the Russians. We should give the rebels more MANPADs so they can shoot down more Russian fighters. We should keep using drones to blow up T-72s with Russian mercenaries inside of them (see the link in the prior post).

Syria is an excellent opportunity for the US to, at low cost, bloody Russia up and keep them occupied while we do other things.

[turboether]

Those sneaky Russians, always copying America.

[Deleted]

No.

You can't pull your punches with Russia. Force is the only language their government understands.

Which we can see in what results exactly? They only seem to push it further every time.

They even outplayed the West twice now, first in the Ukraine and now in Syria.
And if it's true that they influenced the elections in the US, they are possibly more influential than they ever were.

[Skroe]

Remember folks. This gentlemen claims he has zero interest in a war with Russia.

While orgasming because some died.

This is not war with Russia. This is what happens when a less powerful country like's Russia antagonizes a far mightier power. This is the normal way countries behave. It is what keeps the larger peace. Not talk. But fear of consequences. Uncertainty.

World War III did not happen in large part because the US and USSR spent a good 50 years giving each other bruised knees and bloody noses that made very clear each others limits.

The problem with the US the last 25 years is that we got out of that business, so people doubt the very existence of American "red lines". Those red lines deserve a new coat of paint. I say that paint should be Russian Mercenary blood.

You do that for a few years, and just like during the Cold War, you'll see suddenly Countries more careful about testing America's limits. That is how peace is made.

[Dextroden]

This is not war with Russia. This is what happens when a less powerful country like's Russia antagonizes a far mightier power. This is the normal way countries behave. It is what keeps the larger peace. Not talk. But fear of consequences. Uncertainty.

World War III did not happen in large part because the US and USSR spent a good 50 years giving each other bruised knees and bloody noses that made very clear each others limits.

The problem with the US the last 25 years is that we got out of that business, so people doubt the very existence of American "red lines". Those red lines deserve a new coat of paint. I say that paint should be Russian Mercenary blood.

You do that for a few years, and just like during the Cold War, you'll see suddenly Countries more careful about testing America's limits. That is how peace is made.

Also claims to hate Trump's nationalism and American exceptionalism while being the poster child of nationalism and American exceptionalism. It's a good thing.

Look. You can dress it up with whatever leftover jingoism you borrowed from the Vietnam era. You just want to kill Russians for wounding your pride. And you'll waste American lives and money on that horse shit to...avenge Hillary Clinton?

Why do you hate Bush again?

[Deleted]

Syria turned Russia from a gas station with nukes back into a serious power.

Its reported that when oil and gas infrustructure is taken back Russia are getting a 25% cut. Syria has been a big victory for Russia.

[Shinra1]

So what? Russia is the only country that is currently stabilising Syria. Are you guys only fine with America exploiting weaker/poorer countries?