In stark contrast to the behavior of most international companies, the experience of Chinese companies operating in Syria's oil sector stands out as an exceptional case.
While global and regional companies declared force majeure one after another as oil fields fell out of the Assad regime's control in 2011, two giant Chinese companies took a different path, continuing their operations in areas deemed dangerous. Their decision reveals dimensions that extend beyond direct economic viability to broader geopolitical considerations.
Amid the Syrian revolution since 2011, the energy sector was among the hardest hit, with most oil fields falling out of Assad's control, investment contracts being suspended, and major companies like Shell and Total withdrawing. But the irony lay in the stance of two Chinese companies: SIPC, whose contract expired in 2024, and CNPC, whose contract was set to expire in 2027. Reports indicate that the latter recently requested to withdraw from Syria, a significant development that raises questions about the future of Chinese investment there.
A contrasting stance: Why didn't China declare force majeure?
While foreign and Arab companies rushed to declare force majeure—a contractual clause that releases a party from its obligations due to exceptional circumstances beyond its control—the two Chinese companies adhered to their development contracts.
Even when the oil fields in which they operated were outside Assad's control, they maintained their representative offices and continued operations, or at least kept their representation in place.
This decision reflects a long-term Chinese approach that does not treat Syria as a mere transit market, but rather as a strategic link in its chain of major projects, such as the Belt and Road Initiative, where major economic interests are decoupled from temporary security and political fluctuations.
Where are the Chinese oil fields concentrated in Syria?
To understand the significance of the Chinese decision, one must first understand where its investments are concentrated.
According to available reports, Chinese activity has not been limited to a single region, but has extended to fields in the east and west of the country, though the outcomes have varied.
- Fields in Homs Governorate (Central): The Qumqum and Abu Rabah oil fields in the Homs countryside are among the most prominent areas that have witnessed intensive Chinese activity. At the beginning of 2023, experts from the Chinese company Heilong Oil Services and Engineering arrived at these two fields and began exploration and well drilling under new investment contracts. This area remained under the control of the Syrian state, allowing work to continue relatively normally.
- Fields in the Northeast (Hasakah): This is the most complex part of the story. Chinese companies, particularly the China National Petroleum Corporation (CNPC), have long-standing investments in key oil fields in Hasakah Governorate, such as the Awda and Tishrin fields.
These fields, which once produced thousands of barrels per day, were outside Assad's control for many years and were previously under the control of the Syrian Democratic Forces (SDF). They suffered extensive looting and sabotage, with losses estimated at hundreds of millions of dollars.
Production and Financial Value: How Much Is China Losing?
It is estimated that the Syrian oil sector produced around 400,000 barrels per day before 2011, but this has declined to only 100,000-120,000 barrels per day in recent years.
While precise figures for the Chinese companies' share of this production are unavailable, their presence in key fields means that their financial losses due to looting and shutdowns have been substantial. Unconfirmed reports indicate that CNPC's losses in the Awda and Tishrin fields alone may approach $170 million as a result of looting of equipment and infrastructure.
However, these losses apparently weren't enough to push companies to withdraw immediately. Instead, they preferred to stay and protect their assets and long-term investments. Chinese companies view Syria as a promising market not only for oil, but also for future reconstruction, infrastructure, and telecommunications.
The Decision to Withdraw Now: Political or Economic?
With the new Syrian government controlling most of the northeastern oil fields by early 2026, and the Syrian Energy Minister announcing ambitious plans to increase production and rehabilitate the fields in cooperation with international companies, a pressing question arises: Why is CMPC requesting to withdraw now, when the security situation is beginning to stabilize in the government's favor?
Here, the economic and political spheres intersect:
1. US Pressure: Since the fall of Assad, Washington has intensified its pressure on Syria to abandon Chinese technology and equipment, especially in the telecommunications and energy sectors, urging it to cooperate with American or allied companies. This pressure could make the operating environment for Chinese companies more complicated in the coming period.
2. New International Competition: Following the relative stabilization of the situation, international companies from Qatar, Saudi Arabia, the UAE, the US, and Europe are racing to return to Syria or enter it for the first time. This momentum could mean that offers to China are no longer exclusive as they once were, and the new Damascus might prefer to diversify its partnerships.
3. Contract Restructuring: Chinese companies may be reassessing their old contracts signed with the previous regime and seeking to negotiate better terms with the new administration. Withdrawal could be a bargaining chip in these negotiations, or a de facto move if they find the new environment unsuitable for their investments.
The decision by Chinese companies not to declare force majeure during the war years was a purely political one, reflecting Beijing's desire to play a long-term role in Syria and protect its strategic investments. The potential withdrawal request now carries both economic and political dimensions, as companies assess the viability of their investments in light of a new competitive landscape and the contours of a different international order during the reconstruction phase.
The coming days will reveal whether China will be able to adapt to the new reality in Syria, or whether Syrian oil fields will witness a shift in strategic partners from the East to the West and the Gulf.
Zaman al-Wasl
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