Syrian oil plundered by armed groups

Reports have surfaced of rebel groups stealing oil in northeastern Syria while the government is unable to effectively address the problem.

al-monitor People stand on trucks near oil fields in Rmelan, Qamishli province, in Syria, Nov. 11, 2013. Photo by REUTERS.

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turkey, syria, smuggling, oil, military, business, border

Apr 17, 2014

News on the situation of Syria's northeastern oil fields is not pleasant. Governmental authorities, however, do not have the required tools to change the course of sabotage and plundering operations. Therefore, they attempt to reduce these actions through costly combat actions.

Issues affecting oil fields are underreported by media outlets and overshadowed by the abundance of human losses on other Syrian fronts. The majority of operations conducted by the Syrian air force aim to reduce the harm of these actions to the national economy. For this purpose, the air force carried out sorties almost every day, targeting long lines of trucks filled with oil. Some lines extend as far as 2 kilometers (1.4 miles) on their way to the Turkish border and are usually surrounded by guards driving cars that are surmounted by various kinds of anti-aircraft weapons.

Two days ago, in a brief report, the Syrian official news agency SANA announced that the Syrian air force had targeted a market selling stolen oil in the village of Abriha in the city of al-Beserah in the countryside of Deir el-Zour, resulting in a large number of dead and wounded. At the same time, the opposition announced that the bombardment killed four individuals, injured scores of persons and led to the destruction of oil tankers. A similar land operation was conducted on the same day, killing 12 people in al-Mariya farms. Field information obtained by As-Safir shows that the Syrian air force is mainly tasked with fighting the plundering and robbing of this national wealth, regardless of the costly measures smugglers adopt.

Deputy Minister of Oil Hassan Zainab affirmed the aforementioned information. Speaking to As-Safir, he explained that the attack was carried out at an escalating pace and relied on “information or the direct monitoring of the operations.”

Zainab said that putting an end to this trend is extremely difficult amid the chaos in northeastern Syria. Among the said difficulties are the daily gains smugglers and vandals are promised.

According to cross-information from the part of the government and the opposition, around 60,000 barrels of light oil are produced daily, and around 10,000 barrels are sold in the domestic market after being refined through local and primitive means. The rest is smuggled into one single market, Turkey.

According to Zainab, the price of one barrel of stolen oil is $10, which makes the total amount of smuggling per day stand at $500,000, an amount large enough to make any criminal risk his life to get a share. Many of the beneficiaries work with Turkish smugglers who have ties with Turkish intelligence agencies and the army. Therefore, they were able to create protection networks for the roads they take to transport crude oil to traders who buy the barrel for $30. This price is lucrative in comparison to the international price that is roughly $100 per barrel of light oil, and $80 per barrel of heavy oil.

Zainab said there were no other markets, in a reference to Iraq, the Iraqi Kurdistan Region or the government-controlled Syrian regions. According to him, Iraq does not need oil, even if it was smuggled at low prices. However, some information reveals that oil is indeed smuggled to prominent traders in the Iraqi Kurdistan Region.

When it comes to the domestic market, Zainab affirmed that oil refineries in Syria were almost nonfunctional, except for the Banias refinery where oil is imported from friendly countries, notably Iran.

According to a study prepared by the Ministry of Oil, and which “could be further adjusted since it lacked more sources,” around 10,000 to 12,000 barrels are refined in primitive refineries and consumed in these regions without reaching the official Syrian market or foreign markets.

Zainab denied accusations that the government buys stolen oil through mediators, saying in a sarcastic tone, “This, if it were to happen, would save the state a lot of money,” hinting at the fact that Syria is importing oil at the international price when it used to export it.

The oil that is extracted from small wells in eastern Homs does not exceed 13,000 barrels per day. This quantity does not satisfy the needs of a province that is as big as Aleppo. Syria imports around 3 million barrels for $800 million, not to mention other oil derivatives such as fuel.

According to a study that was issued a few days ago, state losses in the oil sector came to 1.7 trillion Syrian pounds ($11.5 billion), while those of foreign companies investing in Syria stood at $6.4 billion. The estimates of stolen oil according to the Ministry of Oil amount to 12 million barrels to present, in addition to 124 cubic meters of petroleum gas wasted during sabotage operations.

The state protects oil wells in the central region, whether through army units, private protection companies or agreements with local tribes.

Even these measures are not perfect, as local officials say that the cost of protecting one barrel is $10 in some regions, which increases the costs of the already low production. These regions enjoy relative safety since they produce mainly natural gas, amounting to 16 billion cubic meters per day. According to Zainab, gas cannot be stolen or else it would have been targeted. Experts say that this is a reasonable quantity. The gas is consumed domestically, especially in electricity production. Zainab believes that the recovery of the oil sector in Syria is farfetched, until a breakthrough is achieved with the ratification of an agreement on oil drilling on the safe Syrian coast.

On the other side, state estimates show that thousands of people have made large amounts of money through the plundering. This has taken place in regions where tribal affiliations are widespread and control is loose, making it easier for organizations such as the Islamic State of Iraq and al-Sham (ISIS), Jabhat al-Nusra and Ahrar ash-Sham to take control of oil fields. Turkey has exclusively benefited from the EU decision issued last April that allows the opposition to “export stolen oil.” Smugglers were given international legal justification, even though these organizations boast about their extremist ideologies, which are drawn from al-Qaeda.

After armed organizations drill for oil, they transport it in tankers to Turkey, despite the ban on trading stolen oil. Oil reaches Turkey’s local markets, as is the case for other stolen products. In fact, the Syrian government accused its Turkish counterpart of implementing these operations. Zainab said, “The smuggled oil is crude and is useless unless refined, which means that Turkish refineries are doing this as they buy crude from smugglers and then sell it.” This was done after “members of Turkish intelligence also stole heavy equipment in these locations.”

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