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A Question of Oil Accounting

Corruption of the Asad regime manifests itself in, among others, bad accounting for oil revenues and spending. Reporting by Syria’s Central Bureau of Statistics of oil revenues in the national budget and balance of payments is confusing, inconsistent, and ambiguous.

The IMF finds that:
“Government finance statistics (GFS) suffer from major deficiencies with respect to definitions, coverage, classification, methodology, accuracy, reliability, and timeliness that generate severe inconsistencies with monetary and balance of payments statistics.”[1] 

Syria’s Statistical Abstract for 2007, 2008, and 2009 reveals (Table 5/5) that 21,425,000 cubic meters of oil per day were extracted on average during each of the three years, equivalent to 152 million barrels (7.15 barrels = 1 m3), or around 420,000 barrels per day. Of this volume, the Banyas refinery (capacity of 133,000 bbl./day) and the Homs refinery (capacity of 107,000 bbl./day) use a total of 240,000 bbl./day. Assuming full capacity refining, Syria’s oil exports must have been 180,000 bbl./day.[2]


The average price for crude oil between 2007 and 2009 was US$75/bbl.
Assuming that Syria’s share after royalties to foreign companies and operating expenses was $50/bbl., the dollar revenues from oil exports should have been in the region of US$3.28 billion for each of the three years,[3]or S£164 billion.[4] But, the national budget (Table 4/14) shows Government Royalty of Joint Oil Fields to be an average of S£43.6 billion for each of the three years, not S£164 billion
Two Important Questions 
The first question is, what happened to the annual difference of S£120 billion or, $2.4 billion for each of the three years?[5]
The second question relates to the revenues from the deliveries of 240,000 bbl./day to the Banyas and Homs refineries. These revenues are missing. The refineries, certainly, do not get crude oil free of charge. At a discount of, say, 30%, the government budget should recognize the Syrian Lira equivalent of US$3.07 for each of the three years.[6] Such an amount is nowhere to be found.
As such, government budget data for each of the three years leave the Syrian Lira equivalent of US$5.47 billion ($2.4 +$3.07) as missing, for a total of US$16.41 billion for the subject three years. 
The oil account (revenues and spending) in Syria has always been under the exclusive direct control of Hafiz Asad and his son. It is an open secret that questioning any aspect of the oil account risks arrest, even charges of treason.
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[1] The International Monetary Fund,Country Report on Syria, No. 10/86, (March 2010), P. 30.

[2] 20,000 bbl./day – 240,000 bbl./day = 180,000 bbl./day.

[3] 180,000 bbl./day x 365 days x $50/bbl. = $3.28 billion per year.

[4] $3.28 billion x S£50 (at the exchange rate of S£50 to $1—the rate was S£47 in 2009, S£47 in 2008, S£50 in 2007) = S£164 billion.

[5] S£120 billion / S£50 = $2.4 billion.

[6] 240,000 bbl./day x 365 days x $50 x 70% = $3.07 billion


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