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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 (CBS) of the country’s oil revenues in the national budget and balance of payments is confusing, inconsistent, and ambiguous. 


The IMF report 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 reveals (Table 5/5) that 21,425,000 cubic meters of oil per day were extracted on average during 2007, 2008, and 2009, equivalent to 152 million barrels per annum (at 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 Homs refinery (capacity of 107,000 bbl./day) use a total of some 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. The question is, what happened to the annual difference of S£120 billion or, $2.4 billion?[5]Additionally, there is no mention of revenues from the 240,000 bbl./day crude oil deliveries to the Banyas and Homs refineries. Certainly, the refineries do not get their crude oil free of charge. At a discount of, say, 30%, the government budget should show the Syrian Lira equivalent of US$3.07.[6]Such an amount is nowhere to be found. Government budget data leave the Syrian Lira equivalent of US$5.47 billion ($2.4 +$3.07) unaccounted for. 

 

It is an open secret in Syria that the oil account (revenues and spending) was under the exclusive personal authority of Hafiz Assad and his son ever since the Assads came to power. It is also an open secret that anyone questioning any aspect of the oil account risks arrest or even charges of treason.



[1]The International Monetary Fund,Country Report on Syria, No. 10/86, (March 2010), P. 30.

[2]420,000 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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