Oil exploration
Effect of global financial crisis
Consumption versus reserves


Syria is located on the eastern side of the Mediterranean Sea. It is surrounded by Turkey to the north, Iraq to the east, Jordan and Palestine to the south and Lebanon and the Mediterranean Sea to the west.

Syria is 185,170 square kilometres in area and its capital is Damascus. It has a population of 21 million, with a growth rate of 2.37% in 2009.

Its natural resources are petroleum, phosphates, iron and manganese ores, rock salt, marble and gypsum.

Oil exploration

The Ministry of Petroleum has already completed a studied survey for oil exploration in the Mediterranean Sea and positive sites have been located. The ministry will soon make an announcement regarding its plans to carry out discovery and exploration activities in the sea.

Syria is experiencing a new phase of economic development, which will result in an increased demand for energy sources. This will motivate thinking on how to increase production from the available energy sources and how to rationalise use of these sources. Production will be increased by expanding the exploration activities across the Syrian territory, as well as by upgrading and developing the existing fields. The ministry has already offered new areas for exploration through a number of tenders. Between 2003 and 2007, 12 contracts for the exploration of new areas were signed with international qualified specialist companies.

A number of new projects are underway for setting up new refineries, including the Furuklos refinery which has a capacity of 140,000 barrels per day (bpd) and the Deir Ezz Zour refinery which has a capacity of 100,000bpd.


The ministry recently declared that investments in the energy sector account for 25% of total government investments at a value of up to $5.5 billion, in addition to more than $3 billion of direct foreign investments in the energy sector. The ministry stated that by 2025, oil production in Syria will have reached no less than 200 billion barrels.

As a result of this huge demand for energy, the Chinese Petroleum Establishment has acquired a 35% stake in Shell Syria for Oil Development, which is entirely owned by Dutch Shell. This will increase Shell Syria's assets in the local oil and gas sector, as it already owns 31.5% of Al Furat Petroleum Company, which exploits three oil production licences covering Deir Ezz Zour, Fourth Annex and Cham. These licences cover about 40 oil and gas wells, which in 2009 generated 23,000 barrels of oil for Shell Syria. This agreement has been strengthened by the partnership between Shell Syria and the Chinese Petroleum Establishment. Both parties will endeavour to continue growth and investment through attractive opportunities in different sectors.

Effect of global financial crisis

The oil industry has a renowned impact on socio-economic stability in many Arab countries, no matter whether they are oil-exporting countries or countries that benefit indirectly from oil through the financing of operators' funds, the channels of trade exchange and bilateral economic projects or joint Arab projects.

In 2009 the returns of the Organisation of Arab Petroleum Exporting Countries (OAPEC) member countries from exporting oil reached about $352.8 billion, a decrease of about $232.50 billion (39.7%) from the level in 2008, when the returns amounted to about $585.3 billion.

The decline of the returns is due to the continuing pressure of the global financial crisis on oil and natural gas prices throughout 2009, which has placed them in a swinging condition. The annual average spot price for the basket of OAPEC's crude materials has declined from $94.4 per barrel in 2008 down to $61 per barrel in 2009. This represents a decline of 33.4%. The average price of the basket ranged from $42.9 per barrel in the first quarter of 2009 to $74.3 per barrel in the final quarter.

Looking beyond the economic impact on the returns, expansion projects planned to handle the expected rise in global demand for oil over the next two decades have also been affected. The completion of many of these projects has slowed down and decision making has been postponed in order to allow the local and global economies to recover.

Consumption versus reserves

In 2010 energy consumption in the OAPEC member countries is expected to grow by 3.2%, which is less than the annual average for energy consumption during the period 2005 to 2009, which was 5.1%. The total energy consumption in member counties is expected to exceed 9.6 million barrels of oil equivalent per day (boe/d). The three major energy consuming countries within the member countries are Saudi Arabia, Egypt and United Arab Emirates.

The following table shows how the value of Syrian oil exports, the consumption of oil products in Syria and the oil reserves in Syria as a result of exploration have changed over the last five years.


Value of Syrian oil exports (US dollars)

Consumption of oil products in Syria (boe/d)

Oil reserves (barrels)


367.2 million


3 billion


521.9 million


3 billion


564.4 million


2.25 billion


798.9 million


2.25 billion


541.4 million


2.25 billion

Given the apparent decline in Syria's oil reserves and the increasing demand for oil, it is necessary to look at new energy source options in order to avoid any future difficulties.

For further information on this topic please contact Gabriel Oussi at Oussi Law Firm by telephone (+963 11 3350 0090), fax (+963 11 331 2581) or email ([email protected]).