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.