The two-year old Syrian civil war has led to the death of over 70,000 people and weakened the 50-year autocracy of the Asad family, as well as destroying much of the country’s wealth. Syria’s oil sector, very small by regional standards, has suffered from both the armed conflict and the sanctions imposed during the past two years. As of October 2012, according to the Syrian Minister of Petroleum and Mineral Resources, the direct and indirect loss to the country’s oil sector stood at around $2.9bn, mainly a result of the western sanctions imposed on exports. Contracts and plans for the upstream sector have either been cancelled or shelved, at least until there is a clear picture of the political outcome of the conflict, while regional plans to construct oil pipelines transiting Syria have been put on the back burner and the infrastructure has suffered its share of destruction. Meanwhile, Israel has taken advantage of the chaos to open the Golan Heights to oil exploration and awarded the first drilling contract last month.
Syria’s oil problems started some time before the March 2011 revolt. Crude oil reserves stood at 2.5bn barrels as of the end of 2011, according to BP’s Statistical Review of World Energy 2012. The US-EU sanctions halted any ongoing or new exploration at a time when exploration had become a necessity as domestic oil consumption approached production levels. Crude oil consumption has been increasing steadily, reaching 292,000 b/d in 2011, both because of population growth (at an annual rate of 1.7%) and the high petroleum products subsidies. The country’s refining capacity is limited, so Syria is obliged to import petroleum products, and several countries such as Russia, Venezuela, Lebanon, Iran and Iraq have continued to export products to Syria (sanctions do not cover exports of products). US Energy Information Administration (EIA) data put Syrian production at 153,000 b/d in October 2012, which is nearly a 60% decline from when the conflict began in March 2011. It had been stable at approximately 400,000 b/d in 2008-10. (CONTINUED - 1176 WORDS)
