Creating new perspectives since 2009

US oil firm operating in ‘murky’ Syria oil business 

January 25, 2021 at 3:31 pm

A view of an oil field in Syria, 19 July 2018 [Adnan Alhusen/Anadolu Agency]

“Pioneering” American entrepreneurs have waded into the “murky” oil business in Syria, according to a report by the Financial Times which investigated the US oil firm Delta Crescent Energy (DCE). The company was founded by a member of a former member of the US Delta Force who knew the Kurdish leadership — the Syrian Democratic Forces — through the security company he founded, TigerSwan.

In April last year, the US Treasury granted a rare license allowing DCE to sidestep American sanctions on Syria’s oil sector. Question marks have been raised over how this has happened. The founders of DCE are said to have donated to Republican candidates but they have denied using political influence to secure the license. Speaking about DCE’s work in the Kurdish controlled north-east region, Joel Rayburn, US special envoy to Syria said that US officials endorsed the project “because we support trying to get the economy of north-east Syria up and running.”

The FT article raised speculations over why former US president Donald Trump reversed his decision to keep US troops in the region having threatened twice to pull them out of the north-east Syria. Trump’s threat was met with criticism after which he admitted that that troops would remain “only for the oil”.

Pentagon spokesperson Jessica L McNulty was also forced to comment on speculations that US soldiers remained to guard the US oil firm, insisting that the Department of Defence had not been tasked with protecting “DCE or any other private company . . . seeking to develop oil resources in north-east Syria”.

READ: Moscow-based Syria business network helps develop Assad’s chemical weapons arsenal

DCE is said to be unlike other major oil firms that have long been involved in pumping crude from the Middle East, including neighbouring Iraq. This unknown outfit’s mission is to explore, refine and export oil from a corner of war-torn Syria controlled by a US-backed Kurdish-dominated militia. “It’s too pioneering; too adventuresome . . . some might say too risky,” the former US ambassador to Denmark told the FT, speaking about DCE’s operations.

Even with the US’ approval, DCE is said to be operating in a murky market. There are question marks over who controls the oil fields and who profits from them. The oil is prized by smugglers, who transport the crude within Syria and to northern Iraq and Damascus, which has awarded development contracts for this oil to Russian companies as a reward for its military ally Moscow. However, the Kurdish administration does not allow either the Russians or the regime direct access to the fields.

The Kurdish Syrian Democratic Forces (SDF), which controls the region, has “no other choices” but to sell to regime brokers or shadowy traders from northern Iraq, said Abdullah Al-Ghadawi, a journalist originally from north-east Syria. The US is said to have turned a blind eye to the $3 million a day oil that’s sold on the black market.