Syria has signed an agreement with Russian oil and gas company SoyuzNefteGaz for joint oil exploration off the Mediterranean coast, in Syria's part of the prolific Levant Basin, according to Syrian, Russian and Iranian state news agencies.
The contract will enter into effect immediately despite US and European sanctions against Syria, where opposition forces and Islamist groups remain in control of onshore oilfields and production has diminished, with exports halted.
According to Al Jazeera, the agreement was signed by SoyuzNefteGaz and Syrian Oil Minister Suleiman Abbas, who is also head of Syria's General Petroleum Company
SoyuzNefteGaz-created in 2000 with an eye on joint ventures in the Middle East and Africa-will reportedly finance the $90 million project in Syria. If test drilling confirms commercial scale reserves of oil and gas, SoyuzNefteGaz will build the necessary infrastructure for development and extraction.
The contract is for oil exploration and production in Block 2 of Syria's territorial water, which stretches from the shore of the coastal city of Tartous to the city of Banyas and covers 2,190 square kilometers.
A combination of conflict and international sanctions has reduced Syria's oil production by 90%, while gas production has dropped from 30 million cubic meters per day to 16.7 million cubic meters per day. Much of the country's pipeline infrastructure has also been damaged.
SoyuzNefteGaz is headed by former Russian Energy Minister Yury Shafranik, and Russia now holds the keys to power brokerage in Syria since the US opted out of air strikes and signed on to a Russian plan for a resolution of the conflict.
Syria is one of Russia's last Middle East strongholds and serves as a base for the Russian Navy.
Israel has already made significant discoveries in the Levant Basin, while Lebanon is preparing for exploration and its first offshore auction but political crisis is holding up key legislation that would make this possible. Syria could end up launching exploration before Lebanon with Russia's help.
By. James Stafford of Oilprice.com
James Stafford is the Editor of Oilprice.com More