Oil and Electricity; What is Said on Official Media vs. What Reality Says.

Oil and Electricity; What is Said on Official Media vs. What Reality Says.

The production of electricity in Syria is becoming an important indicator of the level of economic deterioration. While those concerned with the energy sector (producing and generating oil and gas) talk about prospects for the future amidst deterioration, indicators related to the political economic structure of contracts and partnerships limit the serious possible improvement in the situation of electricity production.

After the major disruption in the system of generating and transporting energy witnessed in the southern region in particular, which led to disconnecting high-tension power lines from major power plants, such as, Deir Ali and Tishreen, representatives of the Ministries of Oil and Electricity came up with official media statements dated in August 04, 2021, saying what should be said about crises and promises and avoiding what cannot be said, which the official media do not present anyhow, about the situation of electricity.

In their statements to Syrian television, government representatives were keen to repeat the determined scenarios about the level of decline in energy production, and the fait accompli represented in producing only 40% of electricity needs and an estimated 25 KW-h annually, out of more than 60 billion KW-h according to the production figures of 2020. Objectively, this major decline in production is subject to the availability of energy in the first place, and gas in particular. It is also related to the capability and readiness of most of fuel-powered steam power plants in case fuel was adequately available. The production of gas and fuel primarily, and the rehabilitation of power plants secondly, are the major problems of the electricity sector, and both are subject to the conditions of sanctions, the possibilities of contracting, the nature of contracts, and the availability of resources in the relationship of the state apparatus with partners.

 

Gas and the Difference of One Million Cubic Meters per Day

Gas contributes to the production of 75% of the currently generated energy, on the other hand, electricity consumes more than 85% of gas production. The correlation between the two productions is deep, according to the statements and the reports of the institution of generation. Estimates of the amounts delivered from gas to electricity have differed between the two Ministries and in the same interview: as according to the Ministry of Electricity, daily delivered gas for generation approximates 8.2 million cubic meters, which constitute half of the need of 19 million cubic meters. While according to the Ministry of Oil, and in the same interview, what is being offered as a daily average approximates 9.3 million cubic meters, so, the difference of one million cubic meters per day in the estimates of the two sides is unexplained. Also, it is not accidental because it means the possibility of increasing the production of generation in gas power plants by 2.3 billion KW annually, which constitutes 9% of the current production. This is one of the aspects that has not been asked about, nor explained by government representatives.

 

Fuel and Waiting for the Power Plants’ Rehabilitation Contracts

Speaking of fuel and its use in electricity, additional questions can be raised. The Ministry of Electricity says it consumes 4500 tons of fuel daily, while the Ministry of Oil indicates that out of an allocation of 7500 tons of fuel allocated for electricity, it uses 6000 tons daily. The difference between the two figures also represents an annual production of approximately 1,6 billion KW-h, and a proportion of 6% of the capability of electricity generation, according to the figures of 2020.

The Ministry of Electricity indicated that the capability of consuming the available fuel is related to the rehabilitation of suspended steam power plants or the rehabilitation of the ones that produce below their capacity because of being timeworn. The most important of them is Aleppo Power Plant that has been suspended since 2015 and whose rehabilitation is being discussed during this year in partnership with an Iranian company. Practically, it is clear that delays in the rehabilitation of steam power plants make the fuel available for electricity unused. As part of the list of promises, the processes of rehabilitation will increase the possibilities of using it until October of this year, i.e., production is supposed to increase by at least 6%.

This improvement and using the fuel available remains subject to contracting with the rehabilitation parties. According to the Aleppo Power Plant model, the first shipment of the power plant’s rehabilitation requirements has recently arrived according to the Syrian Arab News Agency (SANA). This shipment is part of the contract with an Iranian company worth 123 million Euros in less than a year. This took place after regaining control over the power plant since 2016 and declaring a number of rehabilitation contracts with other parties in 2016. However, in 2018, the contracts have been terminated and clarifying the reasons of this suspension and disruption has been ignored. Practically, increasing the capability of taking advantage of the fuel in electricity production is related to the continuation and success of the contracts of the rehabilitation of Aleppo Power Plant, one of the largest power plants in Syria.

 

The Promises of Gas: and the Possibility of Increasing Electricity by 40% within a Year!

Perhaps the most important thing that was mentioned in the interview was the optimistic statements about the gas production plan for a year ahead. As the Ministry talked about an increase by 30% in gas production within a year; about 4.8 million cubic meters per day from about 8 -12 wells in: Dayr Atiyah, al-Sharifa, and Abu Rabah, and rehabilitation in the field of Shaer, Jhaf, Tuinan, and others.

If this increase takes place within a year, as the Ministry of Oil is hoping, it can increase the production of electricity by 10 billion KW-h annually, and a proportion of 40% of the 2020 production, and that is according to the relationship between the production of electricity and gas consumption in statistical reports of electricity. So, the Ministry promises a 40% increase in gas production, hence, in electricity production, as it assured that once more gas was available, gas-powered power plants will be ready and will not need rehabilitation like steam power plants. However, both ministries pointed out to the hopes that are dependent on the prospects of the future of gas, completely ignoring the reasons of its rapid and significant decline after 2018.

Ignoring the recent past: why did gas sharply decline after 2018? The representative of the Ministry of Electricity talked about “creating victory” through gas and generating, and how the Ministry of Oil was able to increase gas between 2016 – 2018 from 7 million cubic meters a day to 13.7 million, an increase by 90% within only two years, after the liberation of the fields of Badia, the central region and others. This “victory” was also accompanied by a large increase in generation, from 45 million KW-h a day to 85 million, i.e., an increase by approximately 88%.

However, none of the representatives specialized in the energy sector has explained to us the significant decline in gas production from more than 13 million to about 9 million meters a day between early 2019 and today; a decline by more than 30%, while other statements have indicated that it exceeded 50%. So, why did this large decline happen in such a short time? This question has not been asked, nevertheless, the representative of Oil talked about the crisis of securing supplies and the difficulty of contracting due to intensified sanctions. He also said that the mentioned plan of the 40% increase comes after signing contracts with friendly parties and Syrian companies that cooperate with the ministry. Nonetheless, that was without explaining the previous decline in production that was also related to sanctions. So, trusting in future promises becomes difficult as long as sanctions continue, and contracting is still difficult, costly, and fragile.

It seems that the contracts on which production was increased between 2016 – 2018 have been terminated at a level that affected 30% of production and disrupted it, and that other contracts that are being concluded today may also increase production by 40%. Also, the issue of the declining and improvement of gas production, hence, electricity, is highly related to the nature of contracting partnerships in the oil sector. What kind of contracts have been terminated? what kind of new contracts are being signed? And on what foundations, shares and quotas? All are questions that the official media do not ask, and the representatives of ministries cannot address, even if they reflected a decline or an improvement in production by 30%. In addition, the possibilities of the rehabilitation of power plants that are also associated with contracts of rehabilitation are subject to partnerships between foreign or internal companies and the state apparatus: partnerships that appear to have become costly, fragile and doomed to the amount of costs, corruption, and their distribution in such contracts. Such contracts and “cutting the red tapes” are always being announced, while neither their costs nor even their termination are being announced.

(Arabic version)

Last modified on Wednesday, 18 August 2021 17:27
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