Conflict and international sanctions are taking their toll
Managing director: Omar al-Hamad
Tel: (+963) 13 191 3333
Already one of the regions smallest producers, Syria saw oil output fall dramatically during 2012 as the countrys ongoing civil war continued to bite. With no end in sight for the devastating conflict, state energy firm Syrian Petroleum Company (SPC) is largely powerless to halt the decline.
Opec, the oil producers group, believes Syrian oil output will fall to a new low of 40,000 barrels a day (b/d) in 2013. Production hit a record high of just under 500,000 b/d in 1996, but has been in steady decline ever since.
SPC was set up in 1974 as the state exploration and production firm, taking over a number of assets seized from international oil companies (IOCs) a decade earlier during the brief union of Arab nationalist Egypt and Syria. SPC, however, has largely chosen to work in concert with IOCs to produce oil, setting up joint venture companies to oversee their work, most notably the Al-Furat Petroleum Company, made up of SPC, UK/Dutch Shell, China National Petroleum Corporation and Indias Oil and Natural Gas Corporation.
Since the uprising began in March 2011, a combination of conflict and international sanctions have hit SPC hard, and the status of companies operating in the country remains an open question.
Role in Syrias economy
SPC is the conduit through which all major oil and gas revenues flow to the government, and as such is hugely important to the Syrian economy. Oil and gas accounted for about 25 per cent of all government revenues in the years before 2011, and for a similar proportion of the countrys economic output.
Role in the global economy
As a small producer and an even smaller exporter, Syria, and hence SPC, has only a modest impact on the global economy, with Opec attributing a loss of about 110,000 b/d of output to the current insecurity in Syria an amount that Saudi Arabia could replace with relative ease. Rather, Syrias importance to the region comes from its geopolitical significance (destabilising the Levant area).
At present, it is hard to conclude what, if any, strategy SPC is likely to follow in the future, given the degree of political uncertainty in Syria.
Syrias gas sector
Syrias Ministry of Petroleum & Mineral Resources oversees the hydrocarbon sector and regulates the work of the General Petroleum Company (GPC), which was created in 2009. GPC oversees the strategy of Syrias upstream oil company, SPC, while upstream gas operations are managed by the Syrian Gas Company (SGC), which was split from SPC in 2003.
SPC operates five gas processing plants producing just over 1 billion cubic feet a day (cf/d) of gas, out of the countrys total gas production of 1.6 billion cf/d. The largest processing plant is the 441 million-cf/d facility at Deir ez-Zour in the east of Syria. Four other plants are operated by international oil companies, including Canadas Suncor and Stroytransgaz of Russia.