The Syrian Petroleum Company’s CEO, Youssef Qablawi, announced on April 10 that Chevron has officially confirmed the company plans to proceed with deep-sea exploration and investment, marking a transition from agreements to actual implementation in a strategy aimed at attracting major global corporations.

Qablawi explained via the “X” platform that the Syrian Petroleum Company, together with Chevron and UCC, has pinpointed the targeted offshore site, enabling the finalisation of contracts and the initiation of technical operations in summer 2026. This signifies the outset of the first deep-sea exploration project in Syrian deep waters.

He highlighted that the project marks the beginning of a new era in the Syrian energy sector, aiming to enhance output, stimulate the economy, and introduce advanced technology. His emphasis was on the project’s broader significance, reflecting on the opportunities it presents and the renewed confidence it fosters among national workers.

Qablawi expressed hope that today’s efforts will have a good impact on the future, highlighting Syria’s capacity for recovery and revival. He thanked everyone who works hard and believes the country deserves excellence.

On March 26th, Qablawi addressed the potential for collaboration in this field with numerous corporations attending the CERAWeek global energy conference in Houston, Texas, including Chevron.

Genuine Return Achievement

Dr. Mahmoud Abdel Karim, an expert in financial and energy markets, stated that the memorandum signed on February 4th between the Syrian Petroleum Company, Chevron, and Qatar’s Power International marks the initiation of evaluation and seismic surveys, not production. Deep-sea seismic surveys can exceed $200,000 per day, and exploratory drilling may last six to ten months, followed by a results evaluation of six months to a year.

Further appraisal drilling could take two to three years before a development plan is established. He emphasised that confirming commercial viability and developing a deep-water offshore production platform will take over a year and exceed $1 billion, following five necessary investments in deep-sea exploration stages:

Geophysical survey.
Exploratory drilling.
Evaluation and verification of commercial reserves.
Engineering design and infrastructure development.
Development drilling and commencement of production.

Each stage of exploratory drilling carries significant risks, with only 20-30% of wells resulting in commercially viable reserves. Mahmoud Abdel Karim’s analysis of the Egyptian Zohr field, discovered in 2015 and operational by 2019, highlights a successful transition from gas importer to exporter due to over $12 billion in investments, leading to nearly 173 billion cubic feet of LNG exports in 2023.

The Egyptian lesson is vital for Syria, which struggles with poor infrastructure, dependence on energy imports, and a requirement for reconstruction funding. Unlike Egypt, Syria lacks expertise in deep-sea exploration and sufficient maritime infrastructure, as well as specialised personnel.

Abdul Karim highlighted that Syria’s legal framework for offshore concession contracts is incomplete, and with the lifting of international sanctions in mid-2025, operational structures are still being established. Consequently, actual cash flow from the Syrian offshore project is not anticipated before 2032, potentially extending to 2035 due to possible technical or political challenges.

Gross Domestic Product

According to Abdul Karim, Syria’s GDP decreased by 53%, from $67.5 billion in 2011 to about $21.4 billion in 2024. Before the conflict, the oil industry produced 390,000 barrels per day, representing over 50% of state revenues, nearly half of exports, and 20% of GDP.

Today, production is between 105,000 and 110,000 barrels per day. The Syrian Ministry of Oil estimates a loss of $91.5 billion in infrastructure for the oil sector, while the UN estimates total losses for both oil and gas at $115 billion.

To forecast the impact on GDP, it is crucial to consider two distinct time phases:

Before actual production, Chevron’s anticipated $2 billion investment in surveying, drilling, and infrastructure will indirectly generate economic value by employing local talent, using local suppliers, and enhancing logistical capacity at the ports of Tartus and Banias, thus creating a multiplier effect on the local economy.

Investing in offshore project development yields significant economic returns, with every dollar spent generating $2 to $3 in the local economy through various channels such as supply chains and wages.

In the second phase of production, Abdul Karim states that if offshore production hits 100,000 barrels per day at a price of $70 per barrel, the annual revenue could total $2.5 billion, roughly making up 12% of the current GDP.

Furthermore, Abdul Karim announced that the Syrian government aims to increase onshore oil production to 380,000 barrels per day by 2030, targeting over $10 billion in annual energy revenues. This growth could enhance the energy sector’s GDP contribution to 35%-45% and help mitigate Syria’s trade deficit, contingent on stable oil prices above $60 per barrel and necessary sector reforms.

The primary challenge remains the rehabilitation of infrastructure, with costs estimated at over $5 billion. Production is projected to reach 180,000 barrels per day by 2027, potentially achieving pre-war levels by 2030, alongside future offshore production as an additional revenue stream.

Indicators of Success

There are four levels of indicators to monitor concurrently, starting with the contractual level, where transitioning from a memorandum of understanding to a legally binding concession agreement tests the partnership’s seriousness. The memorandum requires a dedicated team for this transformation, with the timeframe for completion as a crucial indicator; exceeding 18 months signals potential legal or political complexities that could obstruct progress.

At the legislative and investment framework level, lifting sanctions and creating a clear tax and legal system are essential. Key indicators include an investment law for the offshore energy sector, the state’s royalty rate on production, dispute resolution mechanisms between partners, and profit repatriation allowances.

Comparative experiences suggest that a royalty rate of 10% to 20% and a profit tax of 25% to 35% are attractive for foreign investment in the exploration phase. Adherence to schedules for everything from exploratory drilling to seismic surveys determines the operational performance level.

The annual monitoring of wells drilled, their success rate, daily flow rates upon discovery, and extraction costs per barrel is essential, especially in relation to the Eastern Mediterranean benchmark of $4-$8 per barrel. Any costs exceeding $15 per barrel in Syria would significantly alter the economic viability.

Finally, on a macroeconomic level, monitoring the oil sector’s GDP share and energy revenues ratio to the state budget is crucial, as these indicators represented 18% of GDP and 50% of state revenues before 2011. Achieving those levels again requires successful deep-sea exploration projects and a return to previous onshore production levels. This is geopolitically feasible after the January agreement between the government and Syrian Democratic Forces, but it depends on over $5 billion in rehabilitation investments and the government’s capability to ensure stability and implement the political agreement in northeastern regions.

Syrian-American-Qatari Memorandum

The Syrian Petroleum Company, Chevron International and Power International Holding signed a memorandum of agreement on February 4th to investigate Syria’s first offshore oil resource.
According to the Syrian Ministry of Energy, the pact expands opportunities for offshore gas and oil exploration in Syrian territorial seas, boosting the country’s energy security and advancing the oil industry.