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Syria: Energy and Natural Resources
Country Study > Chapter 3 > The Economy > Industry > Energy and Natural Resources


Although Syria's crude oil reserves were small and production minor by Arab and international standards, in the 1970s and 1980s petroleum extraction played a vital role in Syria's economy, generating much-needed foreign exchange. However, the size of Syria's proven crude oil reserves remained secret. In 1977 United States government figures placed Syria's proven oil reserves at 2.2 billion barrels. International sources estimated that Syria's crude oil reserves had fallen to 1.5 billion barrels by the end of 1983, indicating a life span of no more than twenty-years at 1984 production levels. Some publications listed substantially higher reserves (perhaps reflecting total rather than recoverable reserves) that appeared large in relation to Syrian production data in the 1980s.

Although Syria awarded its first oil concession to foreign firms in the 1930s, it did not emerge as an oil producer until the late 1960s. In 1956 an American company discovered oil at Qarah Shuk (Karachuk) in the northeast near the Iraqi border. In 1959 a West German firm discovered the Suwaydiyah field, located about fifteen kilometers south of the first oil discovery. The Syrian government nationalized the oil industry in 1964, and in the late 1960s the Syrian General Petroleum Company (SGPC),the national oil company, brought the two fields on stream with Soviet assistance. Although Suwaydiyah initially averaged 20,000 barrels per day (bpd) and Qarah Shuk produced 30,000 bpd, the oil from both fields carried American Petroleum Institute (API) quality ratings of 25.5 and 19, respectively. Both had high sulfur contents, confirming the poor quality of Syrian oil. Syria became an oil exporter in 1968 with the completion of a 663- kilometer pipeline to transport oil to a terminal at Tartus on the Mediterranean coast. Both the Qarah Shuk and Suwaydiyah fields continued to produce oil into the 1980s.

Oil exploration intensified in the 1970s. SGPC discovered the Rumaylan field, about ten kilometers southwest of Qarah Shuk, which had produced over thirty-nine million barrels of oil by mid-1984. Smaller fields also produced minor amounts of heavy crude in the 1970s. The Jubaysah field, located about 150 kilometers southwest of Qarah Shuk, came on stream in 1975. It had a 40.2 API crude oil rating but a 0.6 percent sulfur content, suggesting that Syria might look forward to discovering major quantities of light crude. In 1974 the government eased the way for the return of foreign contractors, granting a Romanian company a production-sharing concession. Western companies returned in 1977 when Pecten, a Shell subsidiary, won a 20,000- square-kilometer exploration concession in northcentral Syria. The Syrian American Oil Company and Samoco, a subsidiary of the American-based Coastal States Gas Corporation, won the 15,570- square-kilometer concession to exploit the resources of Dayr az Zawr Province in 1977. Deminex, a West German company, joined the group in 1979. In 1983, after Samoco dropped out, Deminex joined Pecten in an expanded concession of 21,800 square kilometers. Pecten held 31.25 percent, Royal Dutch Shell 31.25 percent, and Deminex the remaining 37.5 percent. Chevron, Pennzoil, and Marathon Oil also won exploration concessions in the 1980s. Marathon's two wells at Sharifah, nears Homs, produced promising results for gas exploitation from 1983 to 1985. Syria's state- owned oil company also continued exploration and drilling to bring the small, newly discovered Qayrik, Wahab, Sa'id, and As Safih fields on stream by the mid-1980s. The 1984 discovery of large quantities of light, sweet crude oil at the Pecten consortium's Thayim field near Dayr az Zawr gave a much-needed boost to the Syrian oil industry and economy. The Dayr az Zawr oil, ranked at API 36 with a low sulfur content, offered the prospect that Syria could cut by up to $200 million its own imports of light crude oil required for use in domestic refineries in the 1990s. Early production estimates confirmed an initial output of 50,000 bpd when the Thayim field came on stream in late 1986. In 1985 the Syrian General Petroleum Company and Pecten formed the Furat Oil Company to operate the concession with the state. In 1986 Czechoslovakia's Technoexport completed a ninety-two-kilometer spur line linking the Thayim field to the currently unused Iraqi-Syrian pipeline. Syrian government officials estimated that production levels at Dayr az Zawr would rise to 100,000 bpd in 1988.

Syria's oil production remained virtually static in the mid- 1980s. The IMF put production at 162,000 bpd for 1985 turned into a deficit in the 1980s. The 1980 surplus of LS2.42 billion fell to a deficit of LS767 million in 1984, making Syria's ability to boost domestic production and reduce oil imports an economic imperative of the 1990s.

Since 1982, when Syria closed its oil pipeline from Iraq and stopped purchasing Iraqi oil as a show of support for Iran in the Iran-Iraq War, Iran has supplied large quantities of oil to Syria on concessionary terms and as outright gifts. In 1984 Iran provided Syria with 6.4 million tons of oil, discounted by US$2.50 per barrel, and 1.6 million tons free, for a total of 8 million tons. In 1985 Iran supplied Syria with six-million tons of oil, including a one-million ton gift. However, Iran interrupted supplies in October 1985 because of Syria's estimated US$1.5-billion payment arrears and price disagreements. Syria turned briefly to Arab suppliers on the spot market, further depleting foreign exchange reserves, before Iran negotiated a new agreement with Syria in July 1986, guaranteeing the supply of 2.5 million tons of oil between October 1986 and March 1987.

Until oil prices jumped in the early 1970s, Syria earned more from the international pipelines that crossed its territory than from domestic oil production. In the early 1950s, the Tapline (Trans-Arabian Pipeline) -- running from the oil fields in Saudi Arabia across Jordan and the southwest corner of Syria to a sea terminal on the Lebanese coast -- was completed. Capacity was 25 million tons of crude oil a year. Syria earned small amounts of foreign exchange from transit fees (reportedly US$2.8 million in the mid-1970s) for the oil crossing the country via Tapline. Various interruptions of pipeline operations, escalating transit fees, and the reopening of the Suez Canal in June 1975 reduced use of Tapline in the 1970s. Pumping via Tapline was suspended in 1977, while Syria negotiated a new arrangement with Lebanon. In 1987 observers were pessimistic about the future uses of Tapline.

The larger and more important pipeline carried crude oil from the former Iraq Petroleum Company (IPC) fields across Syria via Homs, after which the pipeline branched, with one spur leading to Tripoli in Lebanon and the other spur leading to the Syrian terminal at Baniyas. The IPC pipeline (actually three separate lines) had a capacity of about 55 million tons a year in the 1970s. The pipeline began operation in the early 1950s, providing transit fees as well as the crude that was refined at the Homs refinery into products for Syrian consumption. In the 1960s, Syria frequently used its control at the pipeline for political leverage over Iraq, which depended on the pipeline across Syria until the late 1970s, when its pipeline through Turkey began operation.

Transit rates increased substantially after 1966. In the early 1970s, earnings from the pipelines were more important than direct taxes and one of the most important sources of budget revenue. These earnings peaked in 1974 at LS608 million and were estimated at LS575 million in the 1975 budget. In April 1976, however, Iraq cancelled the transit agreement because of price disputes and cut off oil supplies to Syria. Saudi Arabia supplied oil for the Homs refinery until February 1979, when Iraq and Syria negotiated a new agreement, setting transit fees at $0.35 per barrel compared to $0.45 when the pumping stopped. In 1979 Iraq pumped ten million tons of oil through the pipeline, approximately two-thirds less than the average amount pumped between 1971 and 1976. The outbreak of the Iran-Iraq War in September 1980 again interrupted pumping, but it put Syria in a stronger position vis-a-vis the pipeline, given Iraq's need for revenues to finance the war. Although pumping resumed in February 1981, Syria argued that the pipeline cost more to operate (US$31 million in 1981) than it brought in transit fees (US$25.7 million in 1981). In April 1982, after negotiating an agreement to purchase oil from Iran, Syria closed the pipeline to Iraqi petroleum exports.

By the mid-1980s, Syria had two domestic pipeline systems and two refineries. A crude oil line, with a capacity of fifteen million tons a year in 1977, led from the fields in the northeast to a sea terminal at Tartus, with a spur to the refinery at Homs. Three pipelines for refined products from Homs (each with a capacity of 350,000 tons a year) led to the major consumption centers of Damascus, Aleppo, and Latakia. In 1984 the Syrian Company for Oil and Transport (state-owned) carried 9.5 million tons of crude through its pipeline, up from 8.9 million tons in 1983. In 1979 the new Baniyas refinery was also connected to the domestic crude oil and products pipeline system.

The refinery at Homs was completed in 1959 and began processing Iraqi crude oil for local consumption. In 1977 the refinery's capacity stood at about 2.7 million tons, but after the sixth planned expansion in 1985, its capacity doubled to 5.4 million tons per year. The US$143-million project contracted to Czechoslovakia's Technoexport included the construction of a 480,000-ton-per-year hydrogenation unit, a 380,000-ton-per-year catalytic reformer, and two steam-and power-generating units. Four hundred Syrian workers received training in Czechoslovakia in 1985 in connection with the sixth expansion of the refinery. The seventh expansion of the refinery, scheduled to be completed in the late 1980s, involved the construction of a 100,000-ton- per-year base lube oil complex located at the Homs refinery. The Homs refinery used a blend of crude oil in the 1970s, mixing light Iraqi oil with heavy Syrian crude. Israeli bombing raids on Syria during the October 1973 War severely damaged the operating capacity of the Homs refinery, and the desulfurization unit was not fully repaired until 1976. After 1982 Syria used imported Iranian oil with domestic products at the Homs refinery. In 1985 it processed 5.064 million tons, up from 5.197 million tons in 1984.

The Baniyas refinery was completed in 1979 at a cost of LS1.1 billion. The refinery's maximum capacity was six million tons. In its first year of production, the refinery produced only 1.7 million tons, but this figure more than doubled in 1982 to 4.4 million tons. In 1984 and 1985, the refinery operated at 95 percent of capacity, refining approximately 5.7 million tons of crude oil for an annual production value of LS4 billion. Principal products included high octane and regular gasoline, butane gas, jet fuel, asphalt, and sulfur. The plant employed 2,250 workers in 1984, including 73 Romanian technicians -- a sharp decline from the 450 Romanian technical advisers who assisted operations at the Baniyas refinery in 1982.

Syria's natural gas was discovered in conjunction with oil- exploration operations in the northeast part of the country. In 1984 proven gas reserves were estimated at 98.8 billion cubic meters with associated gas reserves of 33.3 billion cubic meters. Although into the 1980s most natural gas was flared, Syria began exporting small quantities of liquified petroleum gas (LPG) in late 1981. Marathon Oil made two promising gas discoveries in 1982 and 1985, finding a gas potential of 450 million cubic meters a day in 1982 at Sharif-2 and 400 million cubic meters a day at Ash Shair I. The economic viability of Marathon's gas discoveries combined with uncertain market forces to cloud future exploitation of these resources. In 1982 Syria awarded major contracts to Technoexport of Czechoslovakia to build a gas treatment plant at Jubaysah and a gas transmission line to Homs for use in the Homs ammonia-urea plant. France also began construction on a gas treatment plant at Rumaylan.

Phosphate was the country's other major mineral resource. The government claimed reserves of one billion tons. The first government-operated mine near Tadmur (Palmyra) began producing in 1971, and two others began operating in 1974. Syrian phospate was low grade (about 30 percent concentration) and high in moisture. Installation of a drying plant in one government-run mine in 1978 helped improve the quality and quantity of output. Production grew from 800,000 tons in 1978 to 1.5 million tons in 1984, but fell slightly to 1.3 million tons in 1985. Syria exported about two-thirds of its phosphate in the 1980s, largely to East European countries as part of barter arrangements concluded between the governments. Although Syrian government officials anticipated that output would triple by 1988 to five million tons and by 2000 equal the output of Morocco, the world's largest producer, production levels have remained well below projected targets. In 1981 Syria's giant triple super phosphate (TSP) plant, built by Romanian contractors at Homs, began production with a capacity of 450,000 tons of TSP, and 800,000 tons of phosphate and phosphoric acid. Syria's production of phosphatic fertilizer more than doubled from 1981 to 1984, rising from 68,333 tons to 191,176 tons.

The other products of the extraction industries were minor. Natural asphalt was extracted at a coastal site and in the central part of the country. In 1976 production amounted to 125,000 tons -- a tremendous jump from the 31,000 or less produced in 1975; however, by 1984 production had declined to 52,000 tons. Pure rock salt deposits, totaling over 100 million tons, existed northwest of Dayr az Zawr. Expansion of the mine facilities in the early 1970s raised the potential capacity to over 250,000 tons a year, but production hovered around 50,000 tons through the mid-1970s. Production peaked at 102,000 tons in 1982, but fell back to 38,000 tons in 1984. In addition, construction materials (sand, gravel, stone, and gypsum) were mined in various parts of the country. In 1986 Syria signed an agreement with Turkey establishing joint ventures for mineral exploration, and Soviet and Polish scientific missions discovered sizable iron ore deposits near Az Zabadani and Tadmur. In late 1986, the government also announced the discovery of significant quantities of diamonds.

Data as of April 1987

Last Updated: April 1987

Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for Syria was first published in 1991. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on

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