Keep up with the news by installing RT’s extension for . Never miss a story with this clean and simple app that delivers the latest headlines to you.

 

Syria signs offshore oil and gas exploration deal with Russia

Published time: December 25, 2013 21:00
A picture taken on November 25, 2013 shows oil rigs in the Kurdish town of Derik, Syria (AFP Photo)

A picture taken on November 25, 2013 shows oil rigs in the Kurdish town of Derik, Syria (AFP Photo)

Damascus has signed a major oil and gas deal with Russian company Soyuzneftegaz which allows for offshore drilling, development, and production to take place in Syria’s territorial waters for the very first time.

The deal permits the exploration of 2,190 square kilometers in the Mediterranean. The costs, which are estimated at around US$90 million, will be covered solely by Soyuzneftegaz.

The contract covers oil exploration in Block no. 2 of Syria's territorial waters, which stretches between the cities of Tartous and Banyas.

Oil Minister Suleiman Abbas said during the signing ceremony that the contract covers “25 years, over several phases.”

During the first stage, which envisages research and initial prospecting, the contractor is expected to invest 15 million,” said a spokeswoman for Syria’s natural resources ministry.“Then, during test drilling, the contractor will further invest $75 million to make at least one test well,” she added, as quoted by RIA Novosti.

In the event that the test drilling shows the site has commercial-scale reserves of oil and gas, the Russian company would build the necessary infrastructure to develop the field and extract the resources, the spokeswoman added.

Under the deal, Soyuzneftegaz will also be responsible for training Syrian staff at the Syrian General Establishment of Petroleum, SANA news agency reported.

The agreement was signed Wednesday by Oil Minister Abbas, Syria’s General Petroleum Company, and Soyuzneftegaz. The accord comes after “months of long negotiations between Damascus and Moscow,” according to the oil ministry.

The contract is “the first ever for oil and gas exploration in Syria's waters,” General Petroleum Company head Ali Abbas told AFP.

As a result of international sanctions, Syria’s oil production has declined by 90 percent since the start of the uprising against President Bashar Assad in March 2011. Gas production has dropped from 30 million cubic meters per day to 16.7 million cubic meters per day, AFP reported, citing official figures.

Additionally, there are losses in the country’s oil sector, which is essential for the Syrian economy, due to the destruction of infrastructure such as railways, oil pipelines, and refineries as a result of the ongoing civil war.

Follow us

Follow us