379 Assaults on Oil Sector and Losses Hit $19.5 Billion – GPC’s Director
Oil sector, which is one of the main pillars of the national economy, has come under hundreds of assaults by the armed terrorist groups since the outset of the crisis in the country.
The number of assaults that caused material damages to the sector reached up to 379 and the total losses hit USD19.5 billion till the end of 2013, Director of the General Petroleum Corporation Eng. Ali Abbas told the Syriatimes e-newspaper’s reporter.
He clarified that the production has gradually slumped and reached just 15.000 barrels –of light oil- per day, as the production of heavy oil has been completely stopped in March 2013 due to incessant assaults on oil pipelines stretching from al-Rmilan fields in Hassaka province to Homs and Banias refineries.
Prior to the crisis, the production reached up to 386.000 barrels a day (40% light and 60% heavy) where around 67% of the production (250.000 barrels) was used to meet refinery feedstock while the rest (127.000 barrels) was exported, according to a report published by the Tishreen newspaper on November 12,2013.
In September 2011, the production nosedived to 280.000 following the US and European sanctions on the oil sector.
All foreign companies working in oil sector –except some Chinese ones [SSKOC and OPC]- withdrew then.
Oil production slips to 96%
In 26 months, Syria’s oil production has slipped by 96% (from 386.000 barrels per day to just 15.000).
The sharp plummet in production of oil and losses have come from the international decisions, the seizure of most oil fields by the armed terrorist groups and acts of vandalism as well as opening the Turkish markets for the stolen oil.
It caused a hike in prices of fuel and all products that depend on oil and gas by more than 200%, according to media reports.
Moreover, the assaults against the gas pipelines, particularly the Arab gas pipeline in al-Betareyeh area outside Damascus, plunged the country into sporadic darkness.
“The Arab gas pipeline, which came under 7 assaults, conveys natural gas to power plants in Damascus and the southern area. The plants comprise Tishreen, al-Nasereyeh and Der Ali,” Eng. Abbas said.
He added that the assaults target citizens while all service sectors are being affected by power outage.
How oil has been stolen
The story of the systematic attack on oil sector started in 2011 by sabotaging oil pumps -costing the government millions- to steal copper pieces, at the cost 15-20 thousand Syrian pound, from the pumps in order to sell them, according to a well-informed source at Al-Furat Petroleum Company (AFPC).
All types of oil rigs were stolen in the first stage.
“High-voltage cables, telephones, computers, oil tanks, devices and 160 cars for AFPC were stolen,” the AFPC source said.
While in the second stage, oil was the target for thieves nationwide as violence escalated and insecurity spread in the areas of oil fields.
Oil theft began with punching holes in pipelines in different ways. The number of holes reached up to 1000, so the competent authorities stopped conveying oil by pipelines to refineries and put production in tanks which were also stolen later by thieves.
Thus, oil wells were the last target for the thieves to get oil in primitive and dangerous methods that caused blazing in some wells plus environmental pollution in the areas and leaving many thieves charred.
“The bandits put crude oil into tankers, then set fire around it until the fuel begins to turn into vapor that passes through a metal hose. The hose is doused then with cold water to condense the vapor whereby gasoline, kerosene or diesel is produced,” Eng. Abbas said.
Official statistics
As many as 20 wells were set ablaze and 300 persons burned to death in Der Ezoour province, according to the GPC’s statistics.
Eng. Abbas declared that at least 128 oil wells have been pillaged.
“The quantity of stolen oil is estimated to the tune of 40.000 barrels a day, besides stealing 16.000 tons of cooking gas,” he said, noting that the bandits have been looking for high productive gushing fields and good quality oil.
Actually, the country lost revenues of oil exports and imported oil in 2013, worth $1.7 billion, according to the Tishreen newspaper.
In 2010, Syria’s revenues from oil exports were $3 billion.
Oil production makes up 24% of the GDP, 25% of the budget’s revenues and 40% of export revenues, according to a report released in 2012 by the National Competitiveness Observatory (NCO).
Gas
In terms of gas production, it was reported that production declined from 28 million cubic meters to 17m cm (around 45%) in the wake of incessant attacks on gas pipelines in the provinces of Der Ezzour and Hassaka and the stoppage of production in factories of Der Ezzour and al-Jebseh in December 2012.
By the beginning of August 2013, al-Jebseh factory was re-operated at 50% of its capacity but no further details were reported in this regard.
The fact that most oil fields in Der Ezzour, Reqaa and al-Hassaka provinces have become in the hands of the armed terrorist groups was the main factor in the collapse of oil and gas production.
Pollution and diseases
An engineer in Der Ezzour province was quoted on the Tishreen newspaper as saying that: gunmen, people in the areas and bandits are investing the Syrian oil.” They extract the oil from wells and then put it inside holes to be conveyed to local-made refineries in Aleppo, Raqqa, Hassaka and Der Ezzour provinces.”
He stressed that refining oil in a bad method causes pollution and diseases to citizens and livestock there.
The new investors of oil do not care about the consequences of refining oil in a bad way because each one could gain Syp 2 million a day from selling oil. They prefer to live two years ostentatiously to spend 20 years in poverty.
There is a daily quarrel over the ownership of the wells and there are around 200 crimes that have been documented so far.
Oil theft was supported by the EU foreign ministers’ decision issued on April 22nd, 2013 that opens the door to selling the Syrian oil to Europe if authorized by the so-called “National Coalition”.
The decision, which is in breach of the international law and UN charter, has encouraged the terrorist groups to go ahead with stealing oil to deplete one of the main pillars of the national economy (oil production).
Rehabilitation cost Syp. 60 bn’
The rehabilitation of oil companies will cost primarily Syp 60 billion, according to Eng. Abbas, who added that SYP 1.37 bn has been earmarked in the 2014 budget to carry out the contingency plan when security conditions become better.
He made it clear that the GPC has drawn up three plans to deal with oil sector according to priorities.
The plans incorporate; contingency plan which will take up a year, short-term plan for 3 years and long-term one for 5 years.
The problem is that pollution and diseases resulting from wrong ways in refining crude oil in the eastern provinces will last for tens of years.
‘Amrit’ contract
On December 25th, Petroleum and Mineral Resources Ministry signed an offshore oil and gas drilling contract with the Russian ‘Soyuzneftegas’ company.
Under the ‘Amrit’ contract, surveys for oil and gas drilling are to be carried out in a total area of 2190 square kilometers stretching from south Tartous shore to Banias city.
The survey and the drilling of the first well will take up 4 years, Eng. Abbas said.
In 2010, The US Geological Survey released a report predicting that the Levantine basin, located among occupied Palestine, Syria, Lebanon and Cyprus, contains around 122 trillion cubic feet of recoverable gas.
Reported by: Basma Qaddour