As one of Iraq's oldest and most implacable enemies, it was inevitable that Syria would vehemently oppose the invasion of Kuwait with political invective and a contingent of troops to the Arab-U.S.-European force in Saudi Arabia.
Syria's consistently hostile attitude toward Iraq has helped to begin the Damascus regime's political rehabilitation in western capitals. It is a move that could be particularly beneficial to its downstream industry, which is entering a period of reorganization and modernization.
WESTERN TIES
The state oil sector has been growing progressively closer to western interests. During the past decade, exploration supported by the Royal Dutch Shell Group and Deminex has transformed the upstream side of the business.
Through participation with state owned Syrian Petroleum Co. (SPC) in al-Furat Petroleum Co., the two European organizations have boosted Syria's crude oil production to about 400,000 b/d and supplemented Syria's unattractive heavy crude slate with easier to sell lighter oils.
SPC plans to work a similar transformation on the downstream side of the business, which revolves around two old manufacturing units: the 126,000 b/d Banias refinery on the Mediterranean coast and the 117,000 b/d Homs plant in northern Syria.
The first stage of the modernization process is under way. UOP has won a $1 million contract to conduct a study on how to revamp, expand, and upgrade the two units to ensure they can meet Syria's demand for products throughout the 1990s.
The study, in which Bechtel and Chem Systems, London, will participate, will also take a more wide ranging look at the general hydrocarbon situation in Syria and the domestic supply/demand balance. A report is to be submitted to SPC about mid-1991.
HIGH SULFUR FUEL OIL
Syria has downstream problems because both refineries operate in isolation and produce too much high sulfur fuel oil that is difficult to sell even in the current tight supply situation. The excess fuel oil problem is particularly acute at Banias.
UOP will assess the possibility of upgrading both refineries and reducing the volume of heavy crude feedstock.
Syria is not immune to environmental pressures that are experienced in Europe and North America. High sulfur fuel oil used in Syrian power generation and other major industrial plants is the cause of considerable atmospheric pollution.
The effects on the domestic marketing scene of phasing out high sulfur fuel oil in favor of natural gas in large industrial plants will also be covered by the study.
A new long term customer has also been signed for light crude from Syria. As much as 20,000 b/d will be supplied to Lebanon once the shutdown Tripoli refinery is ready to resume operations.
The crude will be delivered through the final section of the Kirkuk-Tripoli pipeline, which has been closed to Iraqi exports since 1976 by a dispute between Iraq and Syria over transit fees.
Copyright 1990 Oil & Gas Journal. All Rights Reserved.
