Enab Baladi – Jana al-Issa
The agreement described as “historic” between the Syrian transitional president, Ahmed al-Sharaa, and the commander of the Syrian Democratic Forces (SDF), Mazloum Abdi, regarding the integration of the SDF into Syrian state institutions, heralds, if completed, positive repercussions on various fronts, perhaps most notably the economic sector, due to the wealth and strategic crops in the Syrian Jazira region, which may enhance state revenues and reduce the cost of securing these materials.
So far, the economic details of the agreement have not been clarified, but one of its provisions included the integration of civil and military institutions in northeastern Syria into the management of the Syrian state, including border crossings and oil and gas fields.
The Syrian Jazira constitutes an economic center of gravity and is the largest region containing oil fields and wells. Statistics from the Organization of Arab Petroleum Exporting Countries (OAPEC) indicate that Syria’s oil production in 2011 was about 385,000 barrels per day, of which 238,000 barrels were refined locally, and the remainder was exported, generating an annual revenue of about $3 billion. Currently, Syria is facing crises in securing petroleum materials and imports them in quantities that do not meet demand.
In addition to oil and gas wells, the Jazira region is fertile agricultural land for vital strategic crops, most notably wheat, barley, and cotton, which have suffered significant losses in recent years, after being a primary source for filling the state treasury.
Significant shift
The agreement between the Damascus government and the SDF, if applied, represents a significant shift that will positively impact the Syrian economy given the wealth available in these areas. This will support the nearly empty state treasury or at least meet local demand for petroleum materials, according to a report issued by the Harmoon Center for Contemporary Studies published on March 14.
The report indicated that opening these areas to other Syrian regions would enhance trade movement, create job opportunities, and contribute to improving services and living standards for residents, especially projects related to electricity and water. This, in turn, will reflect on reconstruction efforts, as the unity and stability of Syria will contribute to attracting capital for investments and encourage countries to start reconstruction projects, as the existence of a central government is a driving factor for investment and support.
Revenues, services, and food
Reports indicate that the areas of eastern Euphrates controlled by the SDF hold about 90% of Syria’s oil wealth and 45% of its natural gas, as it controls 43 out of 78 oil fields. Additionally, it controls the most important oil fields in Syria, such as Rmeilan, Suwaidiyah, al-Omar, and al-Tanak.
The return of oil and natural gas fields to the Syrian government means increased production of oil and gas, which will reduce import costs, as confirmed by Dr. Mohammad al-Ghareeb, a professor of economics at the University of Aleppo, to Enab Baladi.
Al-Ghareeb added that local production of oil and gas in this case will cover a significant portion of local needs, leading to a reduction in the trade deficit in Syria and a decrease in foreign currency payments, which will contribute to an actual improvement in the value of the Syrian pound.
The return of natural gas fields will contribute to improving the electricity situation in Syria, which will primarily support the industrial sector and assist in reviving production, as well as improving the living standards of citizens and reducing the electricity costs borne by individuals.
Mohammad al-Ghareeb, Professor of Economics
On the other hand, Dr. al-Ghareeb expects that revenues from oil and gas will significantly benefit the state treasury, enabling the government to increase the general budget value to boost government spending on infrastructure projects and reconstruction on one hand and increase salaries on the other. This means improving the living standards of the Syrian citizen, which will necessarily reflect on increasing consumer spending, thereby stimulating markets and commercial activity.
Regarding agricultural resources in eastern Syria, al-Ghareeb pointed out that the Jazira region is considered the food basket of Syria, encompassing the most important agricultural crops, primarily wheat and cotton. The Jazira region produces more than two million tons of wheat annually, which constitutes 55% of Syria’s total wheat output, and over 500,000 tons of cotton, accounting for 78% of the country’s production.
State control over this strategic agricultural production will provide a significant portion of local needs, and in the future, surplus agricultural products could be exported, resulting in savings in foreign currency and aiding in a noticeable improvement in the value of the Syrian pound.
Regarding the economic sectors that should be prioritized in northeastern Syria, Dr. al-Ghareeb sees the necessity of supporting the agricultural sector through agricultural development projects, assisting farmers with micro-financing loans, and providing essential needs for farmers, which will subsequently result in enhancing agricultural output.
There should also be a focus on supporting infrastructure projects in northeastern Syria, including roads, bridges, electricity, and water supply for various areas, and in a later phase, there should be a shift to support industrial projects and the service sector in the region.
Untapped potential
In 2010, studies conducted by the Syrian Oil Company estimated oil reserves in Syria at approximately 27 billion barrels and 678 billion cubic meters of gas, without accounting for reserves in maritime areas. This indicates vast potential in this sector waiting to be exploited, according to geologist and oil and gas discovery expert Riyad al-Nazzal.
Al-Nazzal noted in an opinion article published earlier this year the urgent need to utilize all available resources to support reconstruction efforts and build the economy, emphasizing the importance of reviving the oil sector, as it is a key pillar of the Syrian economy and a major future revenue source.
He explained that investing in oil reserves requires a comprehensive restructuring of the oil sector in Syria, starting with rehabilitating operational fields and gradually restoring them to production according to a comprehensive plan based on qualified national cadres.
Moreover, it is important to encourage the return of foreign companies to invest in the sector while reviewing service contract terms to ensure sustainable investment that enhances the potential of the sector and guarantees the development of local communities in the areas hosting these projects.
Priority should be given to operating the fields of Suwaidiyah, Rmeilan, Karachok, Hamzah, Yousufiya, and Sharq Khirbet in northeastern Syria, due to their relative preparedness, high productivity, and connection to gas processing facilities at the Suwaidiyah gas station for electricity and domestic gas generation, as well as the Tal Addas station for processing and pumping oil.
Conversely, the fields in Deir Ezzor require significant efforts for rehabilitation and operation and connecting the producing wells to gathering stations from the fields of al-Omar, al-Taim, al-Tanak, al-Ward, Nishan, and Abu Khashab. The same applies to gas fields in the central region, given their direct connection to power stations that feed cities and industrial areas.
Riyad al-Nazzal, Geologist expert
In the same context, new fields should be introduced into production through activating exploratory campaigns to assess promising structures in al-Hasakah, Deir Ezzor, and Homs, which studies and seismic surveys have indicated the presence of oil evidence before 2011. There should also be an expansion in exploration within Syria’s economic waters in the Mediterranean Sea.
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