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POWER PLAY: Syria just gave Russia EXCLUSIVE rights to produce oil and gas

In the final ignominy of the West’s epic failure to depose Assad, they’ve not only lost the war – they’ve lost Syria’s resources

Alex Christoforou

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To the victor belongs the spoils.

Forget about the tiresome mainstream media fiction that it was the United States that defeated ISIS.

Russia played an infinitely more prominent and decisive role in crushing the caliphate, which at the time was being funded and trained by the Obama White House for the sole purpose of removing Assad, and stealing Syria’s energy potential.

The keys to Syria’s oil and gas rights now appear to be going to Russia…the country that was invited, under international law, by the internationally recognized government of Syria, to fight ISIS.

By Viktor Katona for Oilprice.com.

If finally happened…

In accordance with an energy cooperation framework agreement signed in late January, Russia will have exclusive rights to produce oil and gas in Syria.

The agreement goes significantly beyond that, stipulating the modalities of the rehabilitation of damaged rigs and infrastructure, energy advisory support, and training a new generation of Syrian oilmen. Still, the main international aspect and the key piece of this move is the final and unconditional consolidation of Russian interests in the Middle East.

Before the onset of the blood-drenched Civil War, Syrian oil production wavered around 380,000 barrels per day. It has declined for some time then, since its all-time peak production rate of 677,000 barrels per day in 2002. Although the Islamic State was allegedly driven underground, the current output still stands at a devastating 14–15,000 barrels per day.

As for gas, the production decline proved to be lower (it fell from 8 BCm/year to 3.5 BCm/year) due to its greater significance within the domestic economy. 90 percent of the produced gas in Syria was used for electricity production (as opposed to oil, which was either refined domestically or exported), and in view of this, the government took extra care to retake gas fields first as the prospects of reconquest became viable enough.Related: Tesla’s Powerpack: Real Hope Or Mostly Hype?

It’s an understatement to say that whoever takes over Syria’s energy sector will receive a desolate ruin. The country’s refineries need thorough reconstruction after their throughput capacity has halved from the pre-war level of 250,000 barrels per day. This task will most likely be carried out by Iranian companies, in accordance with agreements signed in September last year, which also involved the reconstruction of Syria’s damaged power grid. However, it remains unclear whether this project will go through, as Tehran counted upon an Iran-Venezuela-Syria consortium, which is all but feasible now against the background of Venezuela disintegrating, a new solution ought to be found. In any case, Tehran already got what it wanted in Syria as Iran’s Revolutionary Guard already secured the telecommunications sector.

Russia isn’t the only country that could have helped Syria to rebuild its oil and gas sector — as stated above, Iran could also lend a hand. However, Iran lacks the funds to invest heavily in Syria’s infrastructure — it needs foreign assistance to kickstart new projects at home aggravated by aging infrastructure and rapidly increasing demand. European companies are unlikely to get interested in Syria unless the EU embargo is lifted (in effect until June 1, 2018). Since the end of largescale military operations in Syria did not bring about a change of regime and Bashar al-Assad remains president of Syria, it would be surprising for Brussels not to prolong the sanctions regime (the U.S. will do it without a moment’s hesitation).

Sanctions-wise, Moscow is unafraid of any consequences for it is already under European and U.S. sanctions. With a long-range goal in mind, it could even assent to the significant cost of rebuilding Syria’s oil and gas sector — IMF put the expenses at $27 billion in 2015 but the current estimate lies most likely between $35–40 billion. This includes the totality of rigs, pipelines, pumping stations etc. to be repaired and put back into operation. In some areas, for instance, in the predominantly Kurdish-populated northern provinces with its heavy oil deposits, it’s unlikely to seize the opportunity. Moreover, it remains unclear what will happen to the fields (including Syria’s largest oil field, Al Omar) that were retaken by Western-backed militias, not the Syrian army.

Unfortunately for Royal Dutch Shell (NYSE:RDS-A) which was forced to let go of the 100 kbpd Al Omar field because of the stringent sanctions regime, Damascus seems intent on consolidating the energy sector under the guidance of the national oil company, SPC. By means of political hand-wringing and the extension of Kurdish political rights within a united Syria, this goal can be achieved; however, the issue of selling the oil is just as acute as is its production.

Most of Syrian export-bound oil was destined to Europe, partly because of its geographic vicinity, and partly because European companies Shell and Total (NYSE:TOT) were the largest shareholders in the sector. This is no longer possible as long as the EU ban on Syrian oil exports stays in place. Thus, the new owner would have to find new market outlets, either by relying on adjacent countries like Turkey or Lebanon, or by finding buyers in Asia.

Interestingly, there has been little to no discussion so far on which company will have to take up the uneasy job of bringing Syria’s energy sector back to life. Throughout the war years, only the minuscule Soyuzneftegaz ventured into Syria (eventually relinquishing its prospects in 2015). Tatneft, a state-owned enterprise that develops Tatarstan’s oil and gas fields, is an obvious candidate since Syria (along with Libya, to their detriment) was their first attempt to internationalize their activities. Just as it girded itself for the commissioning of the Qishma oil field, full-scale war broke out and the company was forced to abandon it. Tatneft, Russia’s fifth-largest producer, is interested in returning to Syria once conditions allow for it. Beyond that, it’s still unclear if state majors (Rosneft, Gazprom Neft) would want to join in.

Taking control of gas fields seems a better (and more profitable) bet for Russia. If it manages to secure a fixed price, stable demand is guaranteed domestically, as gas will remain the dominant electricity generation input. Moreover, the continental shelf of the Eastern Mediterranean has yielded the likes of the Zohr, Leviathan and Aphrodite. Lebanon, whose sweetest spots are in-between Zohr and Leviathan, is also inching closer to tap into its assumed gas bounties.

Syria’s offshore potential is still shrouded in mystery, despite some seismic survey in late 2000s, most of the times one just hears allusions that it is as prolific as that of Israel, Egypt or Cyprus. An early USGS estimate put Syria’s potential offshore gas reserves at 24 TCf (700 BCm), more than double of its onshore gas, while its oil reserves at a “mere” 50 million tons, a sixth of its onshore oil reserves.

Syria’s proven reserves of 2.5 bln barrels (341 million tons) of oil and 10.1 TCf (285 BCm) of gas might seem meager compared to those of neighboring Iraq or allied Iran. Taking into consideration that one-third of its reserves are very heavy, viscous crudes, Damascus will have to sweeten the deal to bring in big Russian names — companies that can genuinely make an impact and not just take a chance. But geopolitically, it might be a wise move.

Russia has been keen on increasing its foothold in Iraqi Kurdistan (Rosneft, Gazprom Neft), tapping into Lebanon’s offshore gas (NOVATEK, and having a bigger say in Eastern Mediterranean affairs in general. For that, taking over Syria’s oil and gas sector might be a very powerful, non-military, tool.

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Photos of swastika on Ukrainian mall stairway creates a stir [Video]

Ukrainian nationalist press in damage-control mode to explain away the Nazi sign, but they forgot the name of the street the mall is on.

Seraphim Hanisch

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One of the aspects of news about Ukraine that does not make it past the gatekeepers of the American and Western news media is how a significant contingent of Ukrainian nationalists have espoused a sense of reverence for Nazis. The idea that this could even happen anywhere in the world in an open manner makes the claim seem too absurd to be taken seriously. Gone are the days when the Nazi swastika adorned streets and buildings in Europe. Right?

Well, maybe, wrong.

This was seen in Kyiv’s Gorodok (or Horodok, if you insist) Gallery, a shopping center in that city, located on Bandera Avenue.

The pro-nationalist news service UNIAN wasted no time going to press with their explanation of this incident, which admittedly may be accurate:

Children and teenagers who participated in the All-Ukrainian break dance festival held in the Kyiv-based Gorodok Gallery shopping mall were shocked to see a swastika image projected onto an LED staircase.

The mall administration apologized to visitors, explaining saying that their computer system had apparently been hacked.

“The administration and staff have no relation to whatever was projected onto the LED-staircase, and in no way does it support such [an] act. Now we are actively searching for those involved in the attack,” it said in a statement.

According to Gorodok Gallery’s administrative office, it was not the first time a cyber breach took place.

As reported earlier, Ukraine is believed to be a testing ground for cyberattacks, many of which are launched from Russia. Hackers have earlier targeted critical energy infrastructure, state institutions, banks, and large businesses.

This time, it appears, hackers aimed to feed the Kremlin’s narrative of “Nazis in power in Ukraine” and create a relevant hype-driving viral story for Russian media to spread it worldwide.

The Gorodok Gallery also apologized on its Facebook page and said that this was a result of hacking.

But what about the street that the mall is on? From the self-same Facebook page, this is what we see:


To translate, for those who do not read Ukrainian or Russian, the address says the following:

23 Steven Bandera Prospekt, Kyiv, Ukraine 04073

This street was formerly called “Moscow Avenue.” Big change, as we shall see.

Steven Bandera got his birthday designated as a national holiday in Ukraine last December. He is known in Ukraine’s history for one thing. According to the Jerusalem Post:

The street where the shopping mall is located is named for Stepan Bandera, a Ukrainian nationalist who briefly collaborated with Nazi Germany in its fight against Russia.

His troops are believed to have killed thousands of Jews.

Several Israeli papers picked this bit of news up, and of course, the reasons are understandable. However, for the West, it appears possible that this news event will largely go unnoticed, even by that great nation that is often called “Israel’s proxy”, the United States.

This is probably because for certain people in the US, there is a sense of desperation to mask the nature of events that are happening in Ukraine.

The usual fare of mainstream news for the West probably consists of things like “Putin’s military seizes innocent Ukrainian sailors in Kerch incident” or, “Ukraine’s Orthodox Church declared fully independent by Patriarch of Constantinople” (not that too many Americans know what a Constantinople even is, anyway), but the overriding narrative for the American people about this country is “Ukraine are the good guys, and Russia are the bad guys,” and this will not be pushed aside, even to accommodate the logical grievance of Israel to this incident.

If this article gets to Western papers at all, it will be the UNIAN line they adhere to, that evil pro-Russia hackers caused this stairway to have a swastika to provoke the idea that Ukraine somehow supports Naziism.

But UNIAN neglected to mention that the street name was recently changed to Stephan Bandera (in 2016), and no one appears to have hacked this. Nor does UNIAN talk about the Azov fighters that openly espoused much of the Nazi ideology. For nationalist Ukrainians, this is all for the greater good of getting rid of all things Russia.

A further sad fact about this is the near impossibility of getting assuredly honest and neutral information about this and other similar happenings. Both Ukrainian nationalists and Russian media agencies have dogs in the race, so to speak. They are both personally connected to these events. However, the Russian media cannot be discounted here, because they do offer a witness and perspective, probably the closest to any objective look at what is going on in Ukraine. We include a video of a “torchlight march” that took place in 2017 that featured such hypernationalist activity, which is not reported in the West.

More such reports are available, but this one seemed the best one to summarize the character of what is going on in the country.

While we do not know the motive and identities of whoever programmed the swastika, it cannot really be stated that this was just a random publicity stunt in a country that has no relationship with Nazi veneration.

The street the mall is on bears witness to that.

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Putin: If mid-range missiles deployed in Europe, Russia will station arms to strike decision centers

Putin: If US deploys mid-range missiles in Europe, Russia will be forced to respond.

RT

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Via RT…


If the US deploys intermediate-range missiles in Europe, Moscow will respond by stationing weapons aimed not only against missiles themselves, but also at command and control centers, from which a launch order would come.

The warning came from President Vladimir Putin, who announced Russia’s planned actions after the US withdraws from the INF Treaty – a Cold War-era agreement between Washington and Moscow which banned both sides form having ground-based cruise and ballistic missiles and developing relevant technology.

The US is set to unilaterally withdraw from the treaty in six months, which opens the possibility of once again deploying these missiles in Europe. Russia would see that as a major threat and respond with its own deployments, Putin said.

Intermediate-range missiles were banned and removed from Europe because they would leave a very short window of opportunity for the other side to decide whether to fire in retaliation after detecting a launch – mere minutes. This poses the threat of an accidental nuclear exchange triggered by a false launch warning, with the officer in charge having no time to double check.

“Russia will be forced to create and deploy weapon systems, which can be used not only against the territories from which this direct threat would be projected, but also against those territories where decision centers are located, from which an order to use those weapons against us may come.” The Russian president, who was delivering a keynote address to the Russian parliament on Wednesday, did not elaborate on whether any counter-deployment would only target US command-and-control sites in Europe or would also include targets on American soil.

He did say the Russian weapon system in terms of flight times and other specifications would “correspond” to those targeting Russia.

“We know how to do it and we will implement those plans without a delay once the relevant threats against us materialize,”he said.

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Russia’s Lukoil Halts Oil Swaps In Venezuela After U.S. Sanctions

Under the new wide-ranging U.S. sanctions, Venezuela will not be able to import U.S. naphtha which it has typically used to dilute its heavy crude grades.

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Via Oilprice.com


Litasco, the international trading arm of Russia’s second-biggest oil producer Lukoil, stopped its oil swaps deals with Venezuela immediately after the U.S. imposed sanctions on Venezuela’s oil industry and state oil firm PDVSA, Lukoil’s chief executive Vagit Alekperov said at an investment forum in Russia.

Russia, which stands by Nicolas Maduro in the ongoing Venezuelan political crisis, has vowed to defend its interests in Venezuela—including oil interests—within the international law using “all mechanisms available to us.”

Because of Moscow’s support for Maduro, the international community and market analysts are closely watching the relationship of Russian oil companies with Venezuela.

“Litasco does not work with Venezuela. Before the restrictions were imposed, Litasco had operations to deliver oil products and to sell oil. There were swap operations. Today there are none, since the sanctions were imposed,” Lukoil’s Alekperov said at the Russian Investment Forum in the Black Sea resort of Sochi.

Another Russian oil producer, Gazprom Neft, however, does not see major risks for its oil business in Venezuela, the company’s chief executive officer Alexander Dyukov said at the same event.

Gazprom Neft has not supplied and does not supply oil products to Venezuela needed to dilute the thick heavy Venezuelan oil, Dyukov said, noting that the Latin American country hadn’t approached Gazprom Neft for possible supply of oil products for diluents.

Under the new wide-ranging U.S. sanctions, Venezuela will not be able to import U.S. naphtha which it has typically used to dilute its heavy crude grades. Analysts expect that a shortage of diluents could accelerate beginning this month the already steadily declining Venezuelan oil production and exports.

Venezuela’s crude oil production plunged by another 59,000 bpd from December 2018 to stand at just 1.106 million bpd in January 2019, OPEC’s secondary sources figures showed in the cartel’s closely watched Monthly Oil Market Report (MOMR) this week.

By Tsvetana Paraskova for Oilprice.com

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