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Syrian People’s Assembly Approves Oil Exploration Contracts with Russian Companies

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Syrian People's Assembly Approves Oil Exploration Contracts with Russian Companies

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On December 16th, the Syrian People’s Assembly approved the conclusion of contracts for oil exploration with two Russian companies, state outlet SANA reported.

The contracts were signed earlier in 2019 with Russia’s Mercury LLC and Velada LLC.

Syrian Oil and Mineral Resources Minister Ali Ghanem praised the signing of the contracts, saying that this improved the relations between the two “friendly nations.”

The contract with Mercury LLC is for oil exploration, development and production in Block 7 and Block 19 in the country. The contract with Velada LLC is for Block 23.

The exploration, development and production would be quite expensive, more than $12 million, while one marine well would cost upwards of $100 million to explore, which is a steep cost, according to Ali Ghanem. The contracts, however, include a provision that 90% of the people that work on the projects must be Syrian.

The deals cover exploration and production in the three blocks, including an oilfield in northeastern Syria, scene of Turkey’s recent offensive and also desired by Ankara, and a gas field north of the capital Damascus.

Syrian Oil and Resources Minister Ali Ghanem stated that: “Excavation contracts aim to increase production operations and introduce new areas into service and come within the government direction of friendly countries that stood alongside Syria, led by Russia and Iran, and they achieve the best commercial conditions compared to contracts concluded during the past years in technical and legal terms, stressing keenness in concluding any contract provided that the company is technically qualified and financially appropriate.”

Syrian President Bashar al-Assad is also looking at its allies to play a role in reconstruction.

Minister Ghanem pointed out that the ministry is continuing to conclude marine contracts for oil investment, but economic sanctions on Syria have prevented marine contracts, as marine surveying companies are international companies and waving sanctions against them from working in Syria is complicated. However, the Russian companies are willing to do so and assist.

The Ministry of Oil and Mineral Resources signed three contracts with Russian companies in the field of surveying, drilling and production in the oil and gas sector in the central and eastern regions within the activities of the 61st Damascus International Fair in September 2019. Two contracts were approved, which the third one is and if whether it will be approved remains unknown.

Regarding Syria’s oil, Russian Deputy Prime Minister Yury Borisov said that there was significant improvement in the situation.

“We are witnessing a remarkable improvement in the situation in Syrian al-Jazeera region… and we have a firm stance which stresses that the natural resources on Syrian territories should be a property for the Syrian people and the legitimate government. My country will continue its efforts to improve the situation in Syria and offer support and assistance to it, Borisov said, adding “We hold discussions and negotiations with the Arab states to improve the economic situation in Syria.”

Several other Russian-Syrian projects were also announced in the week starting on December 16th.

Russian Deputy Prime Minister Yury Borisov visited Damascus and met with Syrian President Bashar al-Assad.

He announced that Russia plans to invest $500 million in the next four years in the Syrian port of Tartus. He said construction of the needed infrastructure at the port, which Russia rented from Syria for 49 years in 2017, could begin in 2020.

Russia plans to build a grain hub at Tartus in order to boost its presence in Middle East markets, Borisov said. Deliveries of 100,000 metric tons of grain in humanitarian aid to Syria will begin by the end of December and continue until late spring, he added.

Borisov underlined that the visit to Syria comes at a time when the country witnesses tangible procedures to reconstruct the economy, referring to the obstacles that hinder this target due to the unilateral coercive measures imposed on Syria.

Borisov said there are plans to link Syria’s Mediterranean coast with the Persian Gulf via a railway. This news was specifically interesting for Israeli media, since it was immediately used to fuel some fears regarding Iran supplying weapons to Israel’s northern border via the railway.

Russia’s cabinet of ministers has allocated almost $17 million as part of UN relief efforts to Syria in 2019. The earmarked funds include $5.8 million for a UN program to help Syrian municipalities most affected by the war, $5 million to restore education and children’s health systems and $3 million for the World Health Organization and the UN Population Fund.

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