Syrian Opposition Seeks Control of Oil Resources

Syrian opposition forces attempt to refine and smuggle oil resources under their control, writes Abed Hage.

Topics covered

syrian, sanctions, oil

May 5, 2013

Clouds of black smoke rose into the skies of eastern Syria. Yet, this time, they did not come from damages caused by aerial bombing but rather from the manual operation of an oil refinery. While standing in front of an oil tank, Ahmed, a 35-year-old former farmer who currently works at the refinery, said, “A year ago, the residents decided to refine oil themselves; however, no one knew how to do it, until a person who had studied in Saudi Arabia explained it to them.”

Ahmad, his brother Abdullah and other residents started working at the oil refinery, three months after the regime lost control of the oil fields in the desert province of Deir al-Zour — which has the largest oil reserves in the country — and after they were moved to the hands of opposition forces.

Ali Baraka, 47, who owns a refinery, talked to us about the refining process. He said that “the refining process begins by filling three-quarters of a thousand liter tank” — because the refining process needs air, according to him. Then the heating process — which produces a black cloud — begins by setting fire and increasing the flame under the tank until the oil turns into vapor. Next, water flows to the pipe carrying the steam to be condensed, and the gas that emanates from the combustion rises. When boiled, the various products pass through two pipes. They are then cooled by passing under three pools of cold water, before they are moved into a container. We wait for 20 minutes for the gasoline to overflow, followed by the other derivatives. Once this is completed, three key products (diesel, gasoline and gas) are produced. A barrel of gasoline is sold for 9,000 Syrian pounds ($128), a barrel of diesel is sold at a price ranging between 5,000 and 9,000 Syrian pounds ($71 to $128), depending on its quality, and a barrel of gas is sold for 10,000 Syrian pounds ($142). The residues are mixed with the diesel, and used as fuel for tanks.

He added, “A barrel of crude oil ranges from 1,000 and 6,000 Syrian pounds ($14 to $85). The price of a small refinery that accommodates three barrels is 32,000 Syrian pounds ($456), whereas the price of a refinery with the capacity for 20 barrels is up to 200,000 Syrian pounds ($2,854).”

Ouday al-Dairi, an activist in the province of Deir al-Zour, told us where the refineries are located. He said that 3,000 refineries are spread over the areas of Seilo, Zebari and al-Mayadeen in the eastern countryside of Deir al-Zour, close to the pipelines and wells, particularly near the al-Ward and Tanak oil fields, in which nothing is left according to him. Each well has a different price, depending on the quality of oil it produces and the person in charge. Moreover, young workers, who are paid between 500 and 1,000 Syrian pounds per day ($7 to $14) for every 12 hours of continuous work, work on these refineries. He asserted that Jabhat al-Nusra, which has announced its allegiance to al-Qaeda, has been involved in the smuggling of oil for the last six months, and it oversees the refining and selling of crude oil. He continued, “They do business on the one hand, and engage in battles on the other.”

He said, “While heating, the oil container is similar to a ticking time bomb. It might explode at any moment and kill those who work at the refinery. This is in addition to cases of suffocation and environmental pollution caused by the refining process.”

There are two types of [crude] oil in Syria. There is light crude oil characterized by low viscosity of which no new discoveries are expected. There are also increasingly large quantities of heavy crude oil, and there are high hopes that huge reserves will be discovered in other regions. Syria’s proven oil reserves amount to 2.5 billion barrels, no more than 0.2% of the world’s total, and almost the equivalent of the United Kingdom's 2.8 billion barrels.

Based on a simple calculation we conclude that the current proven reserve — and with the current daily production rate — is enough to last for 20 years to come, knowing that the studies and promising fields include seven times the current proven reserves. In addition, the surveys carried out by the Norwegian energy company SAGEX reported that there is an oil wealth that exceeds 30 billion barrels in place, in almost 13 coastal fields. They confirmed that an area rich in oil with a width ranging between two to four km was not included in this study.

It turned out to be that just four fields (out of a total of 13) — which stretch from the Lebanese border to the coastal city of Banias in Syria — are able to produce 1.6 million barrels per day.

The opposition’s stance

In the meantime, a senior member of the opposition Syrian National Council said that “the opposition will not be able to sell its crude oil for at least a month, due to the absence of a genuine executive authority.” This is despite the fact that the European Union (EU) has eased sanctions on Syria to help the opposition.

Osama Kadi, head of the coalition’s economic working group, confirmed that “nothing can be done at present without an interim government.” He pointed out that this month a proposal on the interim government will be submitted to the National Coalition.

Kadi accused those from the opposition who sell oil, in the absence of a genuine executive authority, of “smuggling and wasting Syria’s wealth.”

From a Sharia point of view, the matter is indisputable since the Sham Islamic Committee (SIC) issued a fatwa on controlling oil wells and stealing oil, twice. The SIC urged “the formation of a committee independent from the military battalions that consists of prominent figures, scientists, religious courts and workers at these facilities to manage and operate them, in order to prevent the country’s resources and wealth from being wasted or misused.” The SIC added that “the environmental and health impact [of these facilities] requires maximum protection and caution in the extraction and refining process, and necessary assistance from experts and specialists, to ward off the damage that may result, and to safeguard the future and people of the country.”

Suleiman al-Abbas, an engineer and the minister of petroleum and mineral resources, stressed the need to contact partners in foreign companies operating in Syria “to exert pressure on their governments to prevent the implementation of the illegitimate decision that is inconsistent with the provisions of international law and the UN charter.” In his position as minister, he called on all employees at the Ministry of Petroleum and Mineral Resources to assume their responsibilities in protecting the resources of the Syrian people, who have the right to invest and preserve them.

Abbas pointed out that the EU's decision is “a flagrant violation of all international treaties regarding state sovereignty, and a contribution in stealing the wealth that belongs to the Syrian people who have sovereignty over these resources as the right of the people.”

The minister explained that the decision included easing the oil embargo imposed on Syria since September 2011, in a way that supports the armed terrorist groups and provides them with money and weapons. This is since it stipulates that the relevant European bodies can authorize three types of transactions in the Syrian oil sector, including funding, insuring and exporting key equipment and technology for the extraction process, and providing the Syrian oil industry with capital.

Smuggling into Turkey

A source, who is a resident of al-Mayadeen, said that refined products are smuggled by [taking] roads adjacent to the Iraqi-Syrian border, until reaching the Turkish border. There, the brokers — as he called them — refused to buy and move the quantities to Turkey, because they are unusable and “corrupt,” as the brokers described them. They simply purchased the stolen quantities of crude oil for half the international price. The deals are often concluded in Syrian or Turkish currencies.

The source added that the refined quantities were returned using primitive methods to be sold to the local population as a kind of aid, and the price collected is symbolic. The source addressed air pollution, which is either due to the primitive refining method or the use of derivatives, which forced him to travel to Damascus to avoid cancerous diseases whose symptoms have become widespread there.

The EU decided to ease some of the sanctions imposed on Syria, including the oil embargo, in a bid to support the opposition. The European Council announced in a statement that it has “eased some EU sanctions on Syria, including the oil embargo, to help the civilian population and support the opposition in the country.”

It noted that the competent authorities in the countries of the EU can allow three types of transactions: import of oil and oil derivatives, including the related finance and insurance; export of infrastructure and technology to manufacture oil and gas in Syria; and the related finance and insurance in addition to investment in the Syrian oil industry.

The EU stressed that before agreeing on any deal of this kind, the competent authorities must consult with the relevant authorities (the National Coalition) and ensure that they are compatible with the European sanctions on Syria, especially those concerning the freezing of the assets of those involved in violent repression in Syria.

The decision to ban oil export from Syria to Europe was taken in September 2011. Deir al-Zour was producing about 420,000 barrels of crude oil per day prior to the sanctions imposed by the Unites States and the EU in 2011.

The basins of oil discovered in Syria contain important oil and gas reserves and there are still promising basins in the sea and in southern and central Syria. Moreover, there are layers of old sandy strata that are kilometers thick and spread across Syria, which have not been sufficiently explored.

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