ConocoPhillips is on track to become the first major US oil and gas company to conclude an upstream agreement with Syria's new government, according to reporting that cites two people familiar with the matter. The expected contract would see ConocoPhillips and partner Novaterra Energy working with the state-owned Syrian Petroleum Company to develop existing gasfields and to pursue new discoveries.
The arrangement builds on a memorandum of understanding the parties signed in November. Sources cited in the report said the formal deal was anticipated to be signed this week.
Syrian officials have previously suggested the arrangement could materially boost domestic gas output. Last year, the Syrian government said the potential deal could raise gas production by roughly 4 million to 5 million cubic meters per day within a year - a sizeable increment for the country given current production levels.
Production in Syria has fallen sharply since the prewar period. The country recorded a prewar high of about 30 million cubic meters per day in 2011; current output has declined by roughly two-thirds from that level, according to the information cited.
The ConocoPhillips agreement follows other recent upstream moves in Syria's energy sector. US firm HKN Energy has started operating at the Rmeilan oilfields in north-east Syria after finalizing a 25-year upstream contract with Damascus to assume operations of the field. In April, the Syrian Petroleum Company also signed a contract with Saudi Arabia's ADES Holding Company to develop gasfields.
Domestic demand and electricity supply remain pressing issues. Experts cited in the reporting estimate Syria needs about 18 million cubic meters of gas each day to run its grid. The country currently depends on imports from Azerbaijan and Qatar to help meet demand and suffers from rolling blackouts. That said, reported electricity availability has improved from roughly two hours per day to about 13 hours per day in recent months.
Contextual notes
- The planned ConocoPhillips-Novaterra partnership would work with the Syrian Petroleum Company to develop and explore gasfields.
- Officials have projected a near-term gain in daily gas output of 4-5 million cubic meters if the project proceeds as described.
- Recent upstream activity in Syria also includes a 25-year contract for HKN Energy at Rmeilan and an April agreement between SPC and ADES Holding Company.
The reported developments reflect ongoing efforts to revive Syria's energy production as the government seeks to address electricity shortages and reduce reliance on imports. The timing and final terms of the ConocoPhillips contract remain subject to confirmation by the parties involved.