Two years ago, three Americans – a former diplomat, a former special agent and an energy official – crossed a flooded bridge in northeastern Syria to talk about oil, a murky business in a complicated neighborhood .
While Western oil majors have long been involved in pumping crude from the Middle East, including neighboring Iraq, the mission of this unknown company was different – to explore, refine and export oil from one corner of the world. War-torn Syria controlled by a Kurdish backed by the United States. dominated militia.
“Companies like Exxon and Chevron don’t do that sort of thing,” said James Cain, one of the three founders of the oil company Delta Crescent Energy. “It’s too pioneering; too adventurous. . . some might say it’s too risky, ”the former US ambassador to Denmark told the Financial Times.
Despite the willingness of the region’s Kurdish-led administration to do business with American society, which has Waiver of US sanctions allowing it to engage in the Syrian oil trade, DCE faces enormous obstacles.
The northeast maintains extremely delicate relations with Washington and the Damascus regime. Local Kurdish-dominated militias provided forces on the ground for the coalition-backed battle against extremist Isis. The region remains exposed to the risk of attack from Turkey or the jihadists, in part kept at bay by 900 American soldiers. President Bashar al-Assad’s regime claims the oil fields as its own and the Kurds have no legal title to the oil. Given the dangerous backdrop, DCE’s business “seems a bit of a stunt,” said David Butter, associate researcher at Chatham House.
After decades of harsh treatment by the ruling regime in Syria, the Kurds have used the anti-regime uprising that began in 2011 to carve out and rule around a third of Syrian territory, which includes most of Syria’s oil reserves. Syria. With production currently estimated at just 30,000 barrels per day, these are “pretty lousy assets,” Butter said.
But the oil is prized by smugglers, who transport the crude to Syria and northern Iraq, and Damascus, which has awarded development contracts for the oil to Russian companies as a reward for its military ally Moscow. The Kurdish administration does not allow the Russians or the regime direct access to the fields.
James Reece, ex-Delta Force and one of the founders of DCE, knew the Kurdish leadership – the Syrian Democratic Forces – through the security company he founded, TigerSwan. Recognizing the opportunities to develop Kurdish-controlled oil fields, Mr. Reece enlisted Mr. Cain, a corporate lawyer, and John Dorrier, former director of the small London-listed oil company Gulfsands, which managed fields in northeastern Syria before sanctions ceased operations in 2011. They created DCE, whose contract covers an area larger than that run by Gulfsands, Mr. Cain told me.
In April last year, the US Treasury granted a rare license for DCE to bypass US sanctions on the Syrian oil sector. Mr. Cain, a Republican, and Mr. Dorrier both donated to Republican candidates. DCE denies that it used any political influence to obtain the license. US officials approved the project “because we support the attempt to revive the economy of northeastern Syria,” said Joel Rayburn, US special envoy to Syria.
Former US President Donald Trump has twice threatened to pull US troops out of the northeast, but overturned his decision after a backlash in Washington and previously said the troops were still there “only for oil.” Yet some of the region’s oil is smuggled into the US-sanctioned Assad regime.
Pentagon spokeswoman Jessica L. McNulty said the Defense Department was not responsible for protecting “DCE or any other private company.” . . seeking to develop oil resources in northeastern Syria ”.
Even with US approval, DCE will operate in a murky market. Northeast crude is currently processed in thousands from the dangerous makeshift refineries or trucked west to a refinery in Homs, one of the two controlled by the regime. Sold at a discount on the black market, it brought in up to $ 3 million a day in income for the SDF before the oil price drop of the 2020s, according to at DoD.
Geographically distant, the SDF has “no choice” but to sell to regime brokers or obscure traders in northern Iraq, said Abdullah Al-Ghadawi, a journalist from northeastern Iraq. Syria. The United States is turning a blind eye, according to a person briefed on the US approach to Syria, who said that “the United States would prefer oil to be traded elsewhere but has never strongly opposed it.”
“All Syrians have a right to the resources of northeastern Syria,” said Berivan Khalid, co-chairman of the Kurdish regime’s sales authorities. “[We] give them as much as possible.
Although DCE has said it wants to negotiate oil sales on the global oil market, “it is not the United States’ gift to unilaterally give the SDF good legal title to crude exported independent of Syrian territory”, said Patrick Osgood, senior analyst at Control Risks Middle. East, a security company. The system of government said that the sale of oil by DCE without its authorization would amount to theft.
Mr. Cain argued that traders should take comfort in the fact that the Treasury “has indicated, by granting our license, that our project is in line with US foreign policy.”
But first, restoring “to full production will cost hundreds of millions of dollars,” Cain said. “We will of course need additional investment.” DCE said only the three founders have invested so far and that it has no other owners. While the ploy might sound risky, if not foolish, Mr Cain said it was worth trying to help the SDF: they “fought alongside us to defeat Isis.” . . they deserve a better life ”.