Printer Friendly
The Free Library
22,728,043 articles and books

The Energy Base Of Syria:.



Syria is shifting rapidly in favour of natural gas as the main source of domestic energy. Its oil reserves Oil reserves refer to portions of oil in place that are claimed to be recoverable under economic constraints.

Oil in the ground is not a "reserve" unless it is claimed to be economically recoverable, since as the oil is extracted, the cost of recovery increases incrementally
 are not expanding at the pace necessary to keep up with the twin requirements of meeting local demand and at the same time generating vital hard currency revenues through exports. With a population of 16.5 million growing at a rate of 3.4% per year, the government in Damascus wants to maximise oil export income while concentrating on gas for the country's energy needs.

Syrian oil production capacity of 562,000 b/d, compared to 610,000 b/d in 1995, appears set to decline further in the coming years. Nearly all major producing oilfields in the country had reached their plateaux by 1996. Since then there have been no significant discoveries. The only important new oilfield to come on stream over the past two years was Kishma, in Deir Ez Zor Deir ez Zor, Syria: see Dayr az Zawr.  province, which was inaugurated in November 1997 (see Oil Market Trends of this week).

The options facing Syria in developing its energy base are limited by political factors. As one of the countries called a "terrorist state" by the US, future investments into its oil and gas sector could be affected if Washington moves to impose sanctions similar to those on Iran and Libya. Over the past year, some US Congressmen have advocated this as one way to punish Syria for its position on the Middle East peace process. For example, Conoco stands to lose out on a $350 million gas development venture in Deir Ez Zor field because of Syrian concerns that future US legislation may affect the project.

Political factors affect Syrian potential for hydro-power generation as well. The country is already producing hydro-electricity to meet power needs to some extent. But there are indications that moves by Turkey to control the Euphrates and Tigris rivers Tigris River
 Arabic Dijlah Turkish Dicle biblical Hiddekel

River, Turkey and Iraq. It originates in the Taurus Mountains at Lake Hazar and flows 1,180 mi (1,900 km) southeast through Turkey and past Baghdad to unite with the Euphrates River at
 through its South-East Anatolian Project, involving a vast network of dams across the two rivers Two Rivers, city (1990 pop. 13,030), Manitowoc co., E Wis., on Lake Michigan at the mouth of the Twin River; inc. 1878. Two Rivers is closely associated with its twin city, Manitowoc, both of which are highly industrialized. , could restrict future Syrian projects in this sector.

Despite endemic problems the Syrian economy had grown by an average of 5% from 1991 to 1996, according to according to
prep.
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3.
 'MEED' of Sept. 5, 1997. Reforms based on Law Number 10 have given a boost to the private sector, whose activity by 1997 accounted for an estimated 63% of GDP GDP (guanosine diphosphate): see guanine. . But the momentum of the early 1990s was not maintained in 1996-1997 and growth figures are slipping. Western critics say the pace of economic reforms is too slow, adding that limited liberalisation n. 1. Same as liberalization.

Noun 1. liberalisation - the act of making less strict
liberalization, relaxation

alleviation, easement, easing, relief - the act of reducing something unpleasant (as pain or annoyance); "he asked the nurse
 measures put in place have been rendered ineffective due to excessive bureaucracy, regulations, a poor legal environment, etc. Indeed, these critics say that an economic assessment on Syria is hard to make as virtually all related statistics are treated as state secrets (see economic base on following pages).

Local Consumption: At present, oil is the main component of the domestic energy consumption mix. But considerable progress has been made in Syria's shift from oil to natural gas to meet local energy demand. Total energy consumption in Syria exceeds 14 million tons of oil equivalent, up from more than 13 million tons in 1996 and 12 million tons in 1993.

Domestic oil consumption exceeds 200,000 b/d. Government efforts to limit oil consumption have met with limited success. Reasons for this range from the rapid growth of population to government subsidies that keep prices down to levels which the people are able to afford.

Now production of associated and non-associated gas is averaging about 17.5 million cubic metres/day - of which 11 MCM/day are being processed for local consumption by the power plants, the oil refineries This is a list of oil refineries. The Oil and Gas Journal also publishes a worldwide list of refineries annually in a country-by-country tabulation that includes for each refinery: location, crude oil daily processing capacity, and the size of each process unit in the refinery.  and other industries, compared to 8 MCM/day in 1996. Gas consumption rose from 217 MCM (MultiChip Module or MicroChip Module) A chip package that contains several bare chips mounted close together on a substrate (base) of some kind.  in 1986 to 972 MCM in 1990, 1.16 BCM BCM Baylor College of Medicine
BCM Become
BCM Business Communications Manager (Nortel)
BCM Broadcom Corporation
BCM Business Continuity Management
BCM Business Contact Manager (Microsoft) 
 in 1992 and an estimated 2 BCM in 1993.

Demand for gas is set to rise rapidly in the coming years. It should reach about a third of Syria's total energy consumption during the first half of the next decade. The power sector is by far the biggest local consumer of gas, which is also used on a smaller scale in manufacturing fertilisers, as well as in the cement, ceramics and metals industries. Five power stations have been converted to gas: the ones in Damascus, the Mhardeh plant, and the plants of Homs and Al Ghab. The power plants at the oil refineries of Tartus and Banias See Pentium M.  have also been converted to gas.

The share of natural gas in electricity generation rose from 0.1% during 1982 to 3.3% in 1984, 3.8% in 1985, 6.4% in 1986 and 7.8% in 1987. It reached almost 18% in 1995 and over 20% in 1997, while the country's energy consumption base has increased considerably during the past three years. A number of gas-fired power stations are to be built in Syria, including a plant at Al Zara (see overleaf o·ver·leaf  
adv.
On the other side of the page or leaf.


overleaf
Adverb

on the other side of the page

Adv. 1.
).

The shift away from oil will entail the laying of 1,160 km of new gas pipelines. This will supply the new power plants, as well as a growing fertiliser sector, an iron and steel complex and other industries as well as household users. By 2000, these will absorb almost 13 MCM/day of natural gas. Gas distribution through domestic grids for household use will take more than 3.5 MCM/day.

Much of the local demand for refined oil products is met by the refineries at Homs and Banias. Syria is self-sufficient in gasoline and is capable of meeting most of the domestic demand for heating oil. A big part of Syrian oil consumption is comprised of fuel oil, of which sufficient quantities are produced locally. But Syria has to import gasoil and diesel oil to meet local requirements. Imports could be substituted if a long-planned refinery at Deir Ez Zor is to be built, or if proposed expansions at the existing refineries are implemented, but projects in this sector have been prone to repeated delays. There are also plans for a 140,000 b/d refinery to be built by the private sector (see next week's DT).

Local marketing of refined products is done by the Syrian Company for the Storage and Distribution of Petroleum Products (Mahruqat). The Syrian Company for Oil Transport (SCOT) operates the country's pipeline network, which carries crude from the fields in the north-east to the refineries and the Tartus and Banias oil terminals. In July 1993, the government authorised Adj. 1. authorised - endowed with authority
authorized

lawful - conformable to or allowed by law; "lawful methods of dissent"

legitimate - of marriages and offspring; recognized as lawful
 two private companies - Musa Fattush & Partners and Bahij Yasaminah & Partners - to undertake the transport of refined products and crude oil within the country and abroad. They are allowed to charter or buy road and sea tankers for the purpose, and may use local infrastructure (roads and railways).

The Power Sector: There has been rapid growth in electricity generation capacity in Syria during the 1990s. Installed power generating capacity at present is above 4,000 MW, and demand is expected to reach that level by 2000. This compares to a peak demand of 2,500 MW in 1991. By 2003, installed capacity is projected to rise to 7,500 MW. But operating capacity remains below the installed capacity. In 1993, installed capacity exceeded 3,000 MW, but operating capacity was about 2,200 MW.

Among the new projects to be carried out in coming years is a 600 MW power plant to be built by the Syrian-owned Sarakbi Group, headed by US-based businessman Bourhan Sarakbi, and Tractebel of Belgium. This 100% private project, the first of its kind in the country, is to be located at Bardeh, 150 km north of Damascus. The government confirmed its support for the project in December 1997, with Tractebel and Sarakbi working since 1994 to get this venture off the ground. The government had wanted a 25% stake in the project but changed its position in 1997. Tractebel and Sarakbi have formed the Syrian Power Investment Company, incorporated under Belgian law, to implement this venture. The power generated will be sold to the Electricity Ministry at market prices. The government is to provide the gas or fuel oil required by the plant, also at market prices.

The rapid rise in generating capacity in recent years followed high demand growth which sparked off a period of power cuts in the early 1990s. This led President Hafez Al Assad to declare in September 1993 that every citizen had a right to a secure electricity supply. Until 1994 power cuts used to last several hours a day; the situation was so bad that supplies in war-ravaged Lebanon and Iraq were better than in Syria. After the government made upgrading this sector a priority, Electricite de France - under a 2-month EU-financed contract in 1994 - did a study to improve the operations of the Public Establishment of Electricity (PEE). Financing for the new ventures was done mainly by Japan's Overseas Economic Co-operation Fund (OECF OECF Overseas Economic Cooperation Fund (Japan)
OECF Opto-Electronic Conversion Function (sensors) 
), the Kuwait Fund for Arab Economic Development (KFAED KFAED Kuwait Fund for Arab Economic Development ) and the Saudi Development Fund (SDF (Standard Data Format) A simple file format that uses fixed length fields. It is commonly used to transfer data between different programs.

SDF Pat Smith 5 E. 12 St. Rye NY Bob Jones 200 W. Main St. Palo Alto CA Comma delimited "Pat Smith","5 E.
).

Mitsubishi Heavy Industries (MHI MHI Manufactured Housing Institute
MHI Montreal Heart Institute (Montreal, Quebec, Canada)
MHI Median Household Income
MHI Main Hawaiian Islands
MHI Material Handling Institute
) has had a large-scale involvement in the Syrian power sector. In December 1995 a 600 MW station began operating at Jandar, south of Homs, built by MHI. This combined-cycle plant was financed by a $410m OECF loan. This plant has four 100 MW gas turbines and two 100 MW steam turbines Steam turbine

A machine for generating mechanical power in rotary motion from the energy of steam at temperature and pressure above that of an available sink. By far the most widely used and most powerful turbines are those driven by steam.
. In addition, MHI began building a 1,000 MW power station at Aleppo in 1996 with a $530m loan from SDF. The company is also building for Syrian Petroleum Co. the 600 MW Al Zara gas-based power station near Homs, with a $440m OECF loan. This power station is to have three 200 MW turbines, with a pressure reduction and metering system for the gas intake facility. It is to be installed by October 1998, with the turbines to start up in phases. MHI had implemented the expansion of the Banias power plant in 1986, under a $296 million Japanese loan.

Capacity expansions on an emergency basis were carried out in the mid-1990s. Eight 125 MW gas turbines were added in various parts of the country during that period. These were installed by FiatAvio of Italy as part of contracts worth more than $300m awarded in 1994 and financed by KFAED. Of these turbines, three generate 375 MW of electricity at Zaizoun in central Syria, fuelled by gas from fields in the Palmyra Palmyra, ancient city, Syria
Palmyra (pălmī`rə), ancient city of central Syria. A small modern village known as Tudmur is on the site.
 region delivered through a 120 km pipeline. Upgrading envisaged at present include work at the 600 MW Mhardeh power station and at the 680 MW Banias plant. Lahmeyer International of Germany has been selected for the consultancy services contract for the Mhardeh plant.

Another important development in this sector is the planned link-up of the Syrian power grid to that of Jordan. Siemens of Germany is in the lead for a contract to build two substations at Deraa on the Jordan border. The company offered the lowest price of $23.5m, but the award has been delayed because Siemens is required to attest To solemnly declare verbally or in writing that a particular document or testimony about an event is a true and accurate representation of the facts; to bear witness to. To formally certify by a signature that the signer has been present at the execution of a particular writing so as  that it is complying with the Arab boycott of Israel, something which it is prohibited from doing under German law. KEC KEC Kootenai Electric Cooperative
KEC Kongu Engineering College (Tamilnadu, India)
KEC Kentucky Exposition Center (Louisville, Kentucky)
KEC Krupajal Engineering College (India) 
 International of India in November 1997 signed a $45m contract to supply and install 400 kV transmission lines for the link-up from the border with Jordan to Homs. The substation and transmission line project is financed by the Arab Fund for Economic and Social Development The Arab Fund for Economic and Social Development, or AFESD, is a Kuwait based, pan-Arab development finance institute. All members of the League of Arab States are members of the fund. As of 2003, it held around U.S. $7.3 billion in assets.  (AFESD AFESD Arab Fund for Economic & Social Development
AFESD Air Force Electronic Systems Division
). This project follows from agreements reached in 1995 in Antalya (Turkey) and on Nov. 6, 1996 in Damascus between the electricity ministers of Egypt, Iraq, Jordan, Syria and Turkey to link their countries' power grids.

The Economic Base: The Syrian economy now faces a different perspective compared to the situation in 1991-1996. At the time, the country's role during the 1991 Gulf war and modest liberalisation measures based on Law No. 10 decreed by President Assad in May 1991 had spurred optimism for the future. The prospects for the Arab-Israeli peace process was bright in 1993-1995 and Syria was expected to gain from regional projects as well as aid from the OECD OECD: see Organization for Economic Cooperation and Development.  states. 'MEED' of Sept. 5, 1997, says the economy grew at an average pace of 5% a year in the first half of the 1990s. But for 1996 it says GDP growth was 4% while for 1997 the estimate is 1%.

This negative shift is due to a number of factors, including the slowness of economic liberalisation, the drop in oil prices and the deterioration of the peace process. Prospects for big regional projects based on peace and for large-scale international assistance to benefit Syria have vanished for the time being.

Increasingly, the country is turning to non-oil sources for hard currency income. These include cotton exports and tourism. The latter generated more than $1 bn in revenues in 1995 and the figure has increased over the past two years. In 1997 cotton exports were estimated to have generated as much export revenues as oil, according to 'Tishrin' daily of Nov. 24, 1997.

The climate for reforms is poor. Syria still has no private banking, there is no stock market and credit cards are not permitted. Cellular phones and internet access See how to access the Internet. , with the latter considered a threat to state security, are not allowed while fax machines were legalised only in recent years. The economy is hampered by state control of more than half the manufacturing capacity, although the private sector is beginning to play an increasingly important role - by 1997 accounting for an estimated 63% of GDP. Yet privatisation Noun 1. privatisation - changing something from state to private ownership or control
denationalisation, denationalization, privatization

social control - control exerted (actively or passively) by group action
 of state industries was ruled out in June 1997 by Economy Minister Mohammed Al Imadi in an interview with UAE (Uninterruptible Application Error) The name given to a crash in Windows 3.0. In subsequent versions of Windows, a crash was called a "General Protection Fault," "Application Error" or "Illegal Operation." See crash in Windows and abend.  weekly 'Emirates Today'.

One of the main reasons for the slowness of reform is the regime's determination not to leave any room for social instability. But unemployment, estimated at 12%, is already a problem with an additional 150,000-200,000 Syrians entering the job market each year. A February 1996 UN study said that about 40% of the rural population and 18% of the urban dwellers live below the poverty line. Another study published in February 1997 by Damascus University Professor Said Nabulsi said Syria would need $60 billion to create new jobs for 3m people by 2011, a virtually impossible sum under current economic circumstances. Job creation is one of the thrust areas of a $12.4m project involving the Syrian government and the UN Development Programme (UNDP UNDP United Nations Development Programme
UNDP Unión Nacional para la Democracia y el Progreso (National Union for Democracy and Progress) 
); the three-year programme which began in January 1997 is focused on improving the Syrian administration as well.

Even those who are employed fare poorly. A 'Tishrin' newspaper poll on Feb. 14, 1998, said that 43% of public sector workers are seeking a second job. According to a report published in July 1997 by Syria's Central Statistical Bureau, the salary of 68% of workers does not exceed $100/month, 52% earn between $60 and $100 and 16% receive less than $60/month. Of the rest, 19.5% earn $100-$140/month, and 4.4% earn $140-$180/month. Only 8.1% of workers take home more than $180 a month.

One way that socio-economic stability is maintained is through Lebanon, which acts as a sort of pressure valve by absorbing around 1 million Syrian labourers. These workers manage to send home the equivalent of about $8-10 million/day. Damascus agreed in February 1998 to set up a free trade regime with Lebanon, with a tariff reduction schedule over 4 years. Currently trade is heavily in favour of Syria with exports to Lebanon totalling $326m in 1997 against imports of $38m.

A resumption of trade with Iraq is expected to generate important revenues in coming years. Syria is hoping to become a transit point like Jordan. Syria and Iraq share a 600 km border. Some transit points are already open, and the UN in August 1997 approved a new entry point into Iraq from Syria, at Al Walid.

There have been some positive developments in 1997. After a visit by World Bank President James Wolfensohn James Wolfensohn AO KBE (born December 1, 1933) was the ninth president of the World Bank Group. Early life
Wolfensohn was born in Sydney, Australia. According to The World's Banker
, on Sept. 1, 1997 the government agreed to make a payment of $269.5m to the bank's account to settle debt arrears A sum of money that has not been paid or has only been paid in part at the time it is due.

A person who is "in arrears" is behind in payments due and thus has outstanding debts or liabilities.
, the largest such payment in the country's history. France agreed in October 1996 to waive To intentionally or voluntarily relinquish a known right or engage in conduct warranting an inference that a right has been surrendered.

For example, an individual is said to waive the right to bring a tort action when he or she renounces the remedy provided by law for such
 $175m in debt and to roll over a similar account. Syria has negotiated deals with other smaller European creditors.

Only Germany remains as a major European creditor, with debts owed of $500m that were incurred during the days of former East Germany East Germany: see Germany. . Debts to what used to be West Germany West Germany: see Germany.  amount to just $30m. Damascus says the former GDR GDR

See Global Depositary Receipt (GDR).
 debt was political and should be treated as such, but Bonn does not share this view. Of Syria's total foreign debt of $20 bn, nearly 75% is owed to Russia (incurred during the days of the USSR USSR: see Union of Soviet Socialist Republics. ) but these are not subject to the same commercial terms as the rest of the debt. Thus the overall debt situation has improved during 1996-97.

A limited devaluation devaluation, decreasing the value of one nation's currency relative to gold or the currencies of other nations. It is usually undertaken as a means of correcting a deficit in the balance of payments.  of the Syrian pound Noun 1. Syrian pound - the basic unit of money in Syria; equal to 100 piasters
pound

piaster, piastre - a fractional monetary unit in Egypt and Lebanon and Sudan and Syria

Syrian monetary unit - monetary unit in Syria
 was carried out in July 1997, with the "neighbouring countries" rate changed from 43.5 Syrian pounds to the dollar to S[pound]45 per dollar. The government said this was part of moves to unify 1. (database, product) Unify - A relational database produced by Unify Corporation.
2. (algorithm) unify - To perform unification.
 the exchange rate, a statement welcomed by bankers who said such a move should have a positive impact on the private sector. The devaluation followed a partial lifting of currency exchange controls in September 1996. Yet in early 1997, a review by the Global Risk Service of DRI/McGraw Hill of the US said the Syrian currency was the riskiest in the world after the Albanian lek For other uses, see Lek (disambiguation).

The lek (plural lekë) is the currency of Albania (ISO 4217 currency code: ALL). It is subdivided into 100 qindarka (singular qindarkë), although qindarka are no longer issued.
 and the Zairean zaire The zaïre was the unit of currency of the Democratic Republic of the Congo and then of the Republic of Zaïre from 1967 until 1997. There were two distinct currencies. Zaïre, 1967-1993 .

Finance Minister Khalid Mahayni announced on Sept. 1, 1997 that the 1998 budget would be based on a unified exchange rate, unlike previous budgets which used to be based on various exchange rates. The 1997 budget of $4.2 bn was 10% higher than that of 1996, with a deficit projected at 3.8% compared to 17% in 1996.
THE SYRIAN CURRENT A/C 1995-96
(S[pound] million)
      1996   1995
Exports, of which   168,782   132,561
  Public sector   123,700   98,682
  Private sector   45,082   33,879
Imports, of which   177,343   137,474
  Public sector   70,464   48,551
  Private sector   106,579   88,923
Trade balance (fob)   -8,561   -4,913
Services balance   +10,917   +15,187
Income (net)   -15,667   -18,520
Transfers (net)   +24,504   +20,856
Current account   +11,193   +12,610
   Exchange rates: $1=[pound]Syr 39.27 (1996), $1=[pound]Syr 34.36 (1995)
   Source: 'MEED' Nov. 14, 1997.


APS Review 9, 2/9 March 1998 - DOWNSTREAM TRENDS - Cont'd SP 35
COPYRIGHT 1998 Input Solutions
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1998, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

 Reader Opinion

Title:

Comment:



 

Article Details
Printer friendly Cite/link Email Feedback
Publication:APS Review Downstream Trends
Geographic Code:7SYRI
Date:Mar 2, 1998
Words:3095
Previous Article:EGYPT - Middle East Oil Refineries (Midor).
Next Article:The Syrian Refining Sector:.
Topics:



Related Articles
LEBANON - 4) PROJECT ORGANISATION.
SYRIA - The Energy Base.
SYRIA - Part 1 - The Prospects & Geology.
SYRIA - Part 2 - The Oilfields In A Managed Decline.
TuRKEY - Oil's Share Of Turkish Energy.
SYRIA - Jan. 15 - Turkey In Energy Deal.
SYRIA - Part 2 - The Oilfields Continue To Decline.
SYRIA - Part 2 - The Oilfields Continue To Decline.
SYRIA - Profile - Ibrahim Haddad.
SYRIA - Profile - Dr. Ibrahim Haddad.

Terms of use | Copyright © 2014 Farlex, Inc. | Feedback | For webmasters