SYRIA - Part 3 - Exports Continue To Decline.

Syrian oil exports have dropped to about 305,000 b/d of crude oils and nearly 65,000 b/d of heavy fuel oil and other petroleum products. This compares with 330,000 b/d of crudes and nearly 70,000 b/d of products in 1998.

The country's exports in early 1996 averaged about 355,000 b/d of crude oils and 80,000 b/d of fuel oil and other products. Exports had begun to rise steadily since 1985, when the first fields of Al Furat Petroleum Co. operated by Shell came on stream.

Due to a steady but managed decline in oil production, having peaked at 615,000 b/d in 1994 with Syrian fields then reaching their plateau, exports will fall to less than 300,000 b/d of crude oil and to about 30,000 b/d of fuel oil by end-2000 or in early 2001 (see the fields' profiles in OMT No. 10).

Shell, the main operator in this country, warned in early 1998 that if no major oil discoveries were made in the following years, Syria could return to being a net oil importer by 2005.

The fall in oil exports would have been steeper had Syria not shifted to natural gas for its domestic energy and industrial feedstocks, with the government having decided not to export gas to Turkey and will only export a small quantity to Lebanon (see Gas Market Trends).

Crude oil exports had risen by 112.3% to just over 300,000 b/d in 1993, and had peaked at 360,000 b/d by end-1993, from 285,000 b/d in 1992, due to an increase in production to 550,000 b/d in that year. Exports of fuels increased because Syrian power plants and industry had shifted away from oil to gas.

The country's two oil refineries take about 245,000 b/d of Syrian crude oils, a level maintained for years (see Downstream Trends). Throughputs at these plants include about 60,000 b/d of heavy Suwaidiyah crudes produced by the state-owned Syrian Petroleum Co. (SPC).

Syria used to be a net importer of oil until 1987. The country then depended on Iranian crude oil supplies, after Damascus cut its links with Iraq years earlier. Now attempts to revive Iraq's oil pipeline are opposed by the US and UK through the UN sanctions against Baghdad.

Quality Of Syrian Export Crudes & Products: About 225,000 b/d of crude oil exports consist of Syrian Light, a blend of light and sweet crudes produced from Al Furat's Deir Ez Zor and Ash Sham fields and from the fields of the SPC-Elf venture. The rest, about 80,000 b/d, is the Suwaidiyah (or Souedie) range of heavy SPC crudes, 24 deg. API with 3.8-4.2% sulphur.

In the past seven years Syrian Light's quality has fallen below the 1993 contractual specification of 36.4 deg. API and 0.68% sulphur. This was because of an increase in production of heavier crudes from Ash Sham fields, followed in 1994 by a big rise in SPC-Elf output to 60,000 b/d. Syria's customers had begun complaining about this since late 1992.

In mid-1993 Sytrol, the state's oil marketing company attached to the prime minister's office, acknowledged that Syrian Light's gravity had fallen to 35.7 deg. API and that its sulphur content had risen to 0.8%. As a result, Sytrol reduced the price of Syrian Light by $0.15/barrel from the beginning of July 1993.

The quality of vacuum gasoil/diesel exports improved in early 1994, with its sulphur content dropping to 0.1-0.2%, after the coming on stream of a new 25,000 b/d hydrotreater at the Banias refinery. Gasoil/diesel exports from this plant have been averaging about 4,000 b/d, down from 7,000 b/d in 1998 and 10,000 b/d in the first quarter of 1996. The Banias refining company has guaranteed its maximum sulphur content at 0.2% and has often lowered this to 0.1%.

There was smuggling of diesel from Syria to Turkey until end-1997, when the Turkish authorities stopped that trade. In early 1998 the authorities on the Syrian side of the border with Turkey reinforced the ban. The move resulted in the stranding of 1,800 tanker trucks on the Syrian side. The diesel was then being bought from the Syrian side at about $210/ton and sold in Turkey for double that price. But it was said that most of the diesel originated from Iraq.