From Oil Price:
“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.”
Oil Price notes that whoever takes over Syria’s energy sector is receiving a “desolate ruin” given Syria’s current output levels and the state of its infrastructure. The country’s refineries require immense reconstruction, and in accordance with agreements signed in September of last year, some of this work is likely to be carried out by Iranian companies. However, Oil Price speculates that this may no longer be the case, as Iran was relying upon an Iran-Venezuela-Syria network that may no longer be viable given Venezuela’s current political climate.
In order to help Syrian oil production grow back to its pre-war standards, Russia is also reportedly planning to help Syria rebuild energy facilities that have been devastated by over half a decade of war.
“We have signed a road map, not only in the field of electricity but also oil and gas, covering the restoration of oil fields and the development of new deposits,” Russian Energy Minister Aleksandr Novak was quoted as saying by multiple outlets.
In December of last year, Reuters reported that the Russian government had announced it would be the only entity helping Syria rebuild its energy facilities.
“The Syrian leadership would like to only cooperate with Russia … in rebuilding all of the country’s energy facilities,” Russian Deputy Prime Minister Dmitry Rogozin reportedly said. “Mr. President Bashar al-Assad said today that Syria has no desire to work with companies from countries which betrayed Syria at a certain moment.”
On its website, Russia’s Energy Ministry said it had signed an agreement on the “rehabilitation, modernization and construction of new energy facilities in Syria.”
“We attach great importance to restoring the Syrian economy, especially the oil and gas sectors which will certainly contribute to the normalization of the economic and social situation in the country,” Novak also said.
In December of last year, a Russian delegation visited Damascus to discuss investment and reconstruction with the Syrian government, including oil and gas projects, electricity, phosphates, transportation, and trade.
“Syria is a land of unlimited riches,” Russian Deputy Minister Dmitry Rogozin, who led the delegation, reportedly said at the time, as quoted by India’s Economic Times.
“Russian companies have the moral right to develop large-sale economic projects here,” Rogozin added, most likely a reference to the apparent success of Russia’s military intervention, which helped the Syrian government reclaim over half of its original territory.
These recent reports also come at a time when the Russian Direct Investment Fund (RDIF) just pledged to set up a pool of investors for the potential $100 billion initial public offering (IPO) by Saudi Arabian state oil company Aramco.
According to Reuters, the RDIF is also working with Chinese investors to facilitate Russia’s participation in the IPO, which is set to become the world’s biggest, valuing Aramco at up to $2 trillion and raising more than $100 billion.
Oil Price also notes that this is most likely just the beginning, with more deals to come, including investment deals in Russia’s Eurasia Drilling, a major independent driller.
While this growing relationship between America’s longstanding ally in the Middle East and two traditional U.S. foes of Russia and China is likely to irk the U.S., the United States already has a plan of its own to surpass and challenge both Saudi Arabia and Russia by drilling and producing enough oil of its own.
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