Enab Baladi – Jana al-Issa
End of May last year, Jonathan Bass, CEO of Argent for natural gas liquefaction, stated that he presented a five-point plan to US President Donald Trump and Syrian President Ahmed al-Sharaa to revive and develop the Syrian oil and gas sector. This plan includes the launching of “SyriUS Energy” to rebuild the country’s energy sector.
According to the American plan to support the energy sector in Syria, a new Syrian national oil company will be established under the name “SyriUS Energy” with the aim of attracting and coordinating foreign technical expertise in line with Syrian national interests. This phase includes designing risk service contracts and production-sharing agreements with “friendly” nations through major American oil companies in Houston like Exxon, Chevron, ConocoPhillips, Excelerate, Total Energy, Shell, and others from the transportation, refining, and production sector.
The plan includes five implementation phases starting from asset recovery and rehabilitation to matters of export and broader commercial relations, as well as the launch of new entities, including the establishment of a legal entity listed on the American stock exchange, which will have a sovereign fund specifically for energy in Syria.
Five implementation phases
The aforementioned plan includes five main implementation phases as follows:
Establishing security and assessing the current situation and asset recovery. This phase includes securing priority oil fields (al-Omar, al-Taim, al-Tanak, and al-Hasakah) while putting a plan in place for the other fields, in addition to conducting technical assessments of pipelines, refineries, and power lines, as well as mapping the emergency fuel supply infrastructure needs and prioritizing them. Stabilizing local supplies: through the rehabilitation of the Homs and Baniyas refineries and the rehabilitation of major pipeline networks, starting with the Arab Gas Pipeline, and expanding access to natural gas for domestic use and energy supplies. Developing an entity listed on the New York or Nasdaq stock exchange that owns and manages assets, with the aim of enhancing or establishing partnerships between the public and private sectors, and ensuring secure and attractive investment, in addition to establishing a new national Syrian oil company under the name “SyriUS Energy” with the objective of attracting and coordinating foreign technical expertise in line with Syrian national interests, including designing risk service contracts and production-sharing agreements with “friendly” countries through major American oil companies. Government mechanisms and transparency: by creating an entity listed on the American stock exchange, which possesses a sovereign fund for energy in Syria, owning 30% of its shares, to manage and distribute oil revenues transparently and confidently, providing transparency for foreign public entities in addition to digitizing the Ministry of Oil systems and establishing them and anti-corruption measures, linking the use of revenues to national infrastructure, health, and energy access. Preparing for exports and regional integration in the energy sector: by being ready for legal and phased exports through Iraq and Israel or the rehabilitated coastal ports, as well as integrating with neighboring countries in energy infrastructure, such as shared electricity networks and oil and gas pipelines, as a tool to promote economic diplomacy.Limited success opportunities
This plan will have an impact on the oil sector in Syria if implemented, according to Dr. Karam Shaar, director of the Syrian program at the Syrian Observatory of Political and Economic Networks.
Regarding the success opportunities of this plan, Shaar stated that it could be favorable since Jonathan Bass, the plan’s provider regarding Syria, is one of Trump’s strongest allies in the oil and gas sectors and has several significant international contracts in this context through his company “Argent,” thus he is a serious person regarding this proposition.
In the recent license number “25” issued by the US administration, related to exemptions for sectors from American sanctions to open the door for investment, there is a clear focus on the oil sector, which could facilitate work in the oil sector without obstructions in this regard.
On the other hand, there are several factors that may indicate that the success opportunities of this plan could be limited, as Shaar explained, because Trump insisted on staying in Syria to protect Syrian oil, according to his famous statement in 2019, and his announcement about Delta Crescent Energy Company’s intention to work in the oil sector in Syria, which did not materialize.
The researcher added that one of the most significant obstacles to success is the complex legal issues present in the Syrian oil sector, which require significant settlements, as oil fields are still divided into “blocks” within many geographic areas. After 2011, several foreign companies signed investment contracts with the Syrian state, and these companies may later defend their contracts, potentially preventing the success of this plan according to international law, especially those companies whose contracts were active before 2011 and still are.
The other challenge relates to the investment file itself, as the Syrian state under Bashar al-Assad sent reports to the Security Council about the state of oil and used them at that time as an opportunity to market the damage of the US presence in Syria, including that the cost of repairing the infrastructure in this sector amounted to six billion dollars, a figure that the proposed SyriUS Energy company is unlikely to be able to gather, according to economist Dr. Karam Shaar.
The expert added that if this company successfully rehabilitated the oil sector in Syria, we would be facing a tremendous economic opportunity that could demonstrate to the world the openness of the Syrian market to external investment.
Gains and challenges
Until this plan is translated into tangible reality, the economic gains remain mere estimates and subject to reevaluation during the implementation process and changing conditions, according to Syrian researcher in local governance and political economy at the Omran Center for Strategic Studies, Ayman Dasuki.
However, on another note, Dasuki believes, in his talk to Enab Baladi, that it is important to look at the plan according to the following gains:
Opening the door for the entry of advanced American technologies necessary for extracting, processing, and transporting energy to the Syrian market. Opening the door for renewed reintegration and incorporation of Syria into regional and global energy equations. Securing the needs of the local market at the beginning for economic recovery necessities. Emphasizing economic diplomacy as a gateway to enhance stability in Syria as part of a broader vision to achieve regional stability.Despite the high expectations and hopes surrounding this plan, there are challenges hindering it, according to researcher Ayman Dasuki, the first of which relates to the issue of providing funding for this plan, whether from the Syrian state or from regional parties or international investors. This is related to how attractive the Syrian energy market is for investment on one hand, and the availability of sufficient security and stability within Syria to start this investment on the other.
Other challenges include aspects related to the governance of the Syrian energy sector in terms of digitization and combating corruption within it, as well as the integration of the energy sector with other sectors, which requires investments in other sectors whose nature and size are currently unknown. Additionally, regional integration will require time and political stability within and between countries in the region, along with legal disputes concerning contracts signed by the Assad regime, which granted rights to Russian and Iranian companies.
11 international companies exit investment… Losses in billions
The Syrian oil sector, a cornerstone of the economy, witnessed sustainable investment growth until the outbreak of the conflict.
In 2010, the International Monetary Fund expected the sector to contribute 18% of Syria’s gross domestic product, but production began to decline in 2012 due to the outbreak of the war and the international sanctions imposed on Syria since that time, forcing 11 international companies responsible for 49.6% of Syria’s total crude oil production in 2010 to abandon their operations.
The damage reported in the oil and gas sector facilities in Syria from 2011 until the end of the first half of 2023 is estimated at approximately 115.2 billion dollars.
Challenges facing US plan to support energy in Syria Enab Baladi.
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