Syria hands oil contracts to Russian firms

BEIRUT - Syria's parliament has approved contracts for oil exploration with two Russian companies in an effort to boost production hit by more than eight years of war and Western sanctions.

State news agency SANA said the deals cover exploration and production in three blocs, including an oilfield in northeast Syria and a gas field north of the capital Damascus.

It said the contracts, passed in a parliament session on Monday, were signed earlier this year with two Russian firms it identified as Mercury LLC and Velada LLC.

Oil Minister Ali Ghanem said handing contracts to these companies was in line with the government's strategy "towards friendly states that stood by Syria, with Russia and Iran at the forefront."

Shunned by Western powers, Syrian President Bashar al-Assad has looked to allies Russia and Iran to play a role in rebuilding, after they helped Syria's army reclaim most of the country.

Syria produced around 380,000 barrels of oil per day before the war but production collapsed after fighting hit the oil-rich east. Oil fields have largely been in the hands of Kurdish fighters who seized swathes of north and east Syria from Islamic State with US help.

US President Donald Trump has said that despite a military pullback from northeast Syria, a small number of US forces would remain "where they have the oil."

Around 600 US troops - which Damascus deems "invaders" - remain after the withdrawal and repositioning, US Defence Secretary Mark Esper said this month.

Syrian state media cited Ghanem as saying the oil ministry would seek to sign offshore contracts for oil investment which has been hindered by economic sanctions.

During the war, oil trade continued between Kurdish-held and government territory. Several gas fields also returned to state control after the army defeated Islamic State in part of Deir al-Zor province in the east in 2017.

Russie eyes multiple projects

With the destructive violence of Syria's civil war having abated in recent months, Russia is considering a slew of major commercial projects in the country.

Deputy Prime Minister Yuri Borisov said after meeting with Syrian President Bashar Assad in Damascus that Russia will spend $500 million to modernize Syria's commercial port of Tartus.

Borisov said in remarks carried by Russian news agencies that the four-year modernization program envisages an overhaul of the old port in Tartus and the construction of a new one.

He added that there is also a plan to build a railway across Syria and Iraq that will link Syria's Mediterranean coast with the Persian Gulf.

Russia has a Soviet-era naval base in Tartus, the only such facility outside the former Soviet Union.

In 2017, Moscow struck a deal with Assad's government to extend its lease on Tartus for 49 years. The agreement allows Russia to keep up to 11 warships there, including nuclear-powered ones.

Speaking during Tuesday's meeting with Assad in Damascus, Borisov noted that Russia helped restore a fertilizer plant in Homs and plans to invest $200 million to expand its capacity.

He also told Assad that Russia will deliver 100,000 metric tons of grain as part of humanitarian assistance to Syria. The shipments will start this month, Borisov said.

A Russian Cabinet document published Tuesday on the official state portal says that the Russian government has earmarked nearly $17 million in assistance to Syria this year. The document says it includes allocations under various United Nations programs to help municipalities and health care facilities in Syria.