Syrian Oil Sector Suffers Disastrous Losses

Article Summary
The Syrian minister of oil has outlined the widespread destruction and looting of Syria’s oil fields and the possibility that this destruction will damage future production, writes Ziad Haydar.

The Syrian oil minister's interview with Al-Thawra newspaper yesterday [April 3] was quietly received, just as his predecessor’s was two years ago. Suleiman al-Abbas talked about fuel prices, import policies, and petroleum processing. The minister also alluded to additional catastrophes that could exacerbate the ongoing Syrian tragedy, the consequences of which no one can predict.

Abbas explained that at least nine oil wells in the eastern sector had been set on fire as a result of the state’s total absence. He also said that other wells in the same sector were being plundered and their oil sold on the Turkish market, which has become an outlet for stolen Syrian goods. This migration to Turkey started with factories that were dismantled, transported in their entirety, and sold in bulk or retail, and has gone all the way to grain storage depots emptied of their strategic reserves. In addition, cotton crops, and now raw petroleum, have been sold.

Abbas said that, in normal times, one well catching on fire was considered “a national disaster. What then would we say about nine wells being on fire, especially considering that three of them are still burning, namely the al-Yamkan-105 well set ablaze last March, and the Jazieh-115 and North East Omar-114 wells torched March 29.”

According to the oil minister, the vandalized wells are the “Tel Marmar fields 1 and 3, Thuhban 134, Tayyaneh 107, Ghalban 105, Qahhar 109, Ghalban, al-Yamkan, Jazieh, and North Omar. Control over five of them was restored, but Qahhar 109, the most dangerous of these wells, was set ablaze Nov. 23, following which a plan was put in place to bring the fire under control and secure the well on Nov. 26, in preparation for it being capped. But its petroleum was stolen and it was set on fire again on Dec. 24.”

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Abbas pointed out that the wells burning out of control were not only an economic disaster, but an environmental one. He said one negative implication of the fires was the formation of water cones within the oil strata that would negatively affect future exploitation and diminish output.

Abbas said estimating the amount of economic damage would be pure conjecture because the wells can’t be physically inspected. But he alluded to a catastrophic “initial loss to date equaling approximately 750,000 barrels, based on previous tests conducted before the attacks, as well as on some assumptions built upon field operations reports.” He added that losses would only multiply as “indiscriminate attacks” continue.

Abbas said the amount of oil that was being taken out of the aforementioned wells had been carefully calibrated “to guarantee the highest output and most effective exploitation. This is completely contrary to the saboteurs’ tactic of keeping the wells’ output valves wide open, resulting in double or triple the output, in violation of the wells’ proper exploitation scheme.”

Media reports indicated that stolen oil was sold for a tenth of its international market value to smugglers and Turkish dealers, who were operating in cooperation with the region’s inhabitants and armed factions controlling the wells. Two main oil fields fell victim to sabotage in the northeastern region, while information was not accurate enough to judge the condition of a third field situated in the wasteland outside Tadmur (Palmyra).

The Syrian Ministry of Petroleum had talked about losses in the sector exceeding $3 billion in the past two years, despite independent estimates putting the losses at $4 billion, especially considering that Syria was forced to import from the black market as a result of the European embargo. The country also has been unable to export its oil. In addition, many oil wells have been out of commission, while others have been looted. The concern is that, as time passes, the intensifying damage suffered by the petroleum sector might become an economic “black hole” as this source of a quarter of the Syrian treasury’s income mutates into an environmental and economic burden as a result of looting and the possible total collapse of the sector’s infrastructure.

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Found in: syrian crisis, syrian, syria crisis, sanctions, oil, economic, bashar al-assad
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