Syria Today | Oil production to fall by 9 percent by 2025

Oil production to fall by 9 percent by 2025

Crude oil production is expected to decline by around 9 percent over the next 15 years, figures released by the government on February 3 reveal.

Speaking at a media conference, Petroleum and Mineral Resources Minister Sufian al-Allaw said Syria plans to produce around 2bn barrels of oil from 2009 to 2025, an average of 342,465 barrels per day (bpd). Syria’s crude oil production stood at 376,920 bpd last year.

Over the same period, the government aims to produce some 160bn cubic metres of natural gas. This averages at 27.4m cubic metres per day, a 23 percent rise on last year’s production which weighed in at 22.3m cubic metres per day. The government aims to increase its use of gas for producing electricity and in the transportation, industrial and petrochemical sectors.

Allaw said the ministry will open tenders this month to international energy companies for the exploration of eight new sites covering a total area of around 60,000 square kilometres. He said that earlier in the year the ministry had opened tenders to international companies for the development of seven fields with the aim of increasing productivity.

Allaw added that the ministry will also relaunch tenders for offshore exploration at four sites in Syrian waters covering a total of 5,000 square kilometres. To date, interest in Syrian offshore activity has been low. The country’s first offshore auction, held in late 2007, resulted in only one bid from a consortium led by the private UK firm Dove Energy.

Other figures show that Syria’s crude oil production held steady at 376,920bpd in 2009, on par with the 376,525bpd produced in 2008. Light crude accounted for 40.5 percent of production in 2009, with heavy crude making up the remaining 59.5 percent. Exports of light crude ceased in July last year following the government’s decision to reserve it for use in its own refining system.

There is some confusion regarding production rates, however, with figures previously released by the ministry putting the 2008 production level at 379,400 bpd. If this figure is accurate, oil production would have fallen by 0.7 percent over 2009. Under the latest figure, it rises by 0.1 percent. No reason for the discrepancy was provided by the ministry.

Fields operated by the state-owned Syrian Petroleum Company (SPC) yielded 200,783bpd last year, a 2.1 percent increase. Production from joint ventures between the SPC and various foreign firms stood at 170,120bpd, down by 2.42 percent. Production at two of the largest joint ventures, Al Furat Petroleum and Deir Ez Zor Petroleum Company, fell sharply over the year, by 12.9 percent and 6.9 percent respectively. Al Furat is a joint venture between the government and Shell, while Deir Ez Zor Petroleum is a partnership between the government and Total.

Natural gas production averaged at 22.3m cubic metres per day in 2009, up 7.2 percent from the 20.7m cubic metres per day produced in 2008. The bulk of this, 17.2m cubic metres, was produced by the SPC.

Meanwhile, one of the country’s two new refining projects appears to have run into trouble. The Furoqlos refinery near Homs is a joint venture between the Venezuelan state oil company PDVSA (33 percent), the National Iranian Oil Refining and Distribution Company (26 percent), Malaysia’s Bukhari Group (26 percent) and the state-owned Homs refinery (15 percent). Allaw said the results of a feasibility study had “proved discouraging”, particularly for the Malaysian partner. According to an initial estimate, the refinery would cost SYP 119.6bn (USD 2.6bn) to build. Allaw added that the Venezuelan partner might increase its stake, providing the project with the necessary funding.

Local press have also reported that the China National Petroleum Company, slated to build a 100,000bpd refinery near Deir ez-Zor, is now looking to renegotiate the terms of the project.