Oct 27, 2019

Analysts: Big energy companies won't bite on Trump's Syria oil plan

Ben Geman, author of Generate

Photo: Tasos Katopodis/Getty Images

ExxonMobil and other big energy companies will likely be cool to President Trump's idea of working with the U.S. to produce oil in Syria, analysts say.

Driving the news: Trump reiterated the idea and name-checked Exxon during remarks this morning on the killing of ISIS leader Abu Bakr al-Baghdadi by U.S. forces.

  • "[W]hat I intend to do, perhaps, is make a deal with an ExxonMobil or one of our great companies to go in there and do it properly," Trump said at the White House.
  • He raised the same idea at a Cabinet meeting last week. Exxon declined to comment on Sunday.

The big picture: The U.S., despite the pullback from Syria, is reportedly deploying troops to a northeastern region to prevent oilfields from falling into ISIS' hands.

But, but, but: Oil majors are unlikely to take interest in the idea, analysts tell Axios.

"I doubt there will be a rush by oil companies to work in a region that is a hotspot for military action and civil unrest," said Michael Webber, an energy scholar with the University of Texas at Austin.

  • "International oil and gas companies aren’t looking for risky places to operate, they are looking for safer places to operate — which is one reason why west Texas has been enjoying a boom in production," he said in an email exchange.

Where it stands: Syria, even at its peak, was not among the world's big oil producers.

  • Production peaked at roughly 600,000 barrels per day in the mid-1990s, but has long been in decline and plummeted when a civil war broke out nearly a decade ago. It's now just a tiny fraction of those levels and would require substantial investment to revive.
  • And there would be legal barriers too. “Oil, like it or not, is owned by the Syrian state,” Brett McGurk, former U.S. envoy to the multilateral anti-ISIS coalition, said last week, per the Wall Street Journal.

One level deeper: Webber, deputy director of UT-Austin's Energy Institute, criticized the Trump administration's maneuvers.

  • "[T]he announcement that oil was a motivator for our troops’ movements affirms critics’ worst conclusions that U.S. foreign policy and defense strategy are about oil and no longer about defending human rights or promoting democracy abroad," he said.

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