Total Operations in Syria

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History

Total's relationship with Syria dates back to 1988, when the company signed its initial Production Sharing Agreement (PSA) with the Syrian Petroleum Company (SPC), forming the Deir Ez Zor Petroleum Corporation (DEZPC).[1]

According to a leaked US diplomatic cable from August 2006, Total's attitude towards operations in Syria appeared "non-committal at best", in sharp contrast with the agressive pursuit of new opportunities shown by Shell and PetroCanada. According to the cable, Total executives hoped to retain a presence in the country but had been directed to avoid new commitments.[2]

However according to a further cable dating from September 2008, Total CEO Christophe de Margerie signed three agreements with the Syrian Ministry of Petroleum in conjunction with the visit of French President Sarkozy to Damascus. The first agreement related to the extension of the company's license at Deir Ez Zor until 2012. The second represented a commitment of US $100 million by Total to increase gas production and delivery to market from the Tabiyeh gas field to an estimated 51 million cubic metres. Thirdly, the Syrian government agreed to partner exclusively with Total in conducting feasability studies for several potential projects, including cooperation on "gas projects with neighbouring countries".

According to Total country director Hatem Nuseibeh, this third agreement essentially granted Total the inside track for developing the gas infrastructure to connect Syria with the Akkas field in western Iraq, when the political environment would allow this. Another French official commented that this deal would put Total at the head of a line to received the Kirkuk-Banias pipeline renovation contracts, when the governments of Iraq and Syria reached an agreement.[3]

Activities

Prior to the 2011-12 revolution, Total was present in Syria on the Deir Ez Zor permit. The permit is is operated by the Deir Ez Zor Petroleum Corporation (DEZPC), and Total holds a 50% stake in the venture. In November 2008 the Deir Ez Zor permit was extended by 10 years up to 2021.[4]

Total is also present at the Tabiyeh field. The contract for the Tabiyeh gas project was signed in July 2009 between the Syrian General Petroleum Corporation (GPC) and 'Total E&P Syrie'. Under the contract, Total were to invest around US $150 million.[5]

Combined, in 2010 all of Total's assets in Syria produced 39,000 barrels per day (bpd), compared to 20,000 bpd in 2009 and 15,000 bpd in 2008.[4]

Impact of Uprising 2011

In December 2011 Total announced it was suspending operations in Syria in line with recently tightened sanctions by the EU which indirectly target its local partner, the Deir Ez Zor Petroleum Corporation. While Deir Ez Zor was not directly on the EU's list of targeted firms, Syria's state-owned General Petroleum Company (GPC), which owns a 50% stake in the joint venture, is named.

The suspension of Total's operations came a week after Shell made a decision to pull out of Syria, and further reduced Syria's oil output by 39,000 bpd.[6]

References

  1. "Total negotiates new agreement with Syria" Syria Today, May 2008.
  2. "Royal Dutch Shell Largest Winner In Current Bid Round" Wikileaks, 23 August 2006.
  3. "Sarkozy's Visit Yields Victory For French Oil Company" Wikileaks, 15 September 2008.
  4. 4.0 4.1 "Exploration & Production Operations in the Middle-East" Total, retrieved 7 March 2012.
  5. "GPC & Total E&P Syrie sign service contract for Tabiyeh Gas Project" Syria Oil and Gas News, retrieved 13 February 2012.
  6. "Total exits Syria following tightened EU sanctions" Oil and Gas Journal, 12 July 2011.

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