22 November 2013, 06:18

Soyuzneftegaz reinforcing positions in Syrian raw materials market

Soyuzneftegaz reinforcing positions in Syrian raw materials market

Soyuzneftegaz is reinforcing its positions in the Syrian raw materials market. The Arab Republic provided the Russian company with a license for discovering of hydrocarbons along the coastal area of the country.

Soyuzneftegaz and Damascus are going to sign a contract for shelf drilling in the near future. Terms and conditions have already been talked through. Syria hopes that new joint projects with Russia will contribute to the growth of foreign investments in the country. However, it’s too early to wait for a substantial inflow of capitals, Vitaly Kryukov, an analyst with the Market Research Department of the Kapital financial house, says.

“It’s a difficult region where many problems haven’t still been solved. So it’s premature to talk about big investments heading towards Syria,” Kryukov explains.

However, Syria's authorities are expecting other Russian oil and gas companies in their country as well. Experts say that, for example, Russian company Zarubezhneft may show interest in Syrian oil and gas.

Russian oil producers have been helping Syria to look for and develop Syrian oil and gas deposits for already many years. Soyuzneftegaz sent its experts to Syria 10 years ago. In 2005, they found oil with the total potential of extraction of 1 mln barrels per year at oil deposits that were explored earlier. If oil or gas are also found in Syria's coastal zone, this would mean tens of millions of extra dollars for the Syrian economy.

Vice President of the Center of Political Conjuncture Dmitry Abzalov speaks about the prospects of the new project:

“First of all, it should be noted that the volume of oil extraction in Syria is not as large as, say, in Russia. On the other hand, I believe that this project has very good prospectives. And, taking into account the deposit's geographic location, investments in the development of oil production in Syria may become quite large. Because of the project's low prime cost, its profitability may be much higher in comparison with other counties of the Middle East – if military and political risks become lower.”

According to experts' forecasts, in some time from now, the production of oil in Syria may reach 7 mln barrels a day. And, from the point of view of the amounts of oil deposits, Syria may find itself at the 4th place in the world.

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