Syrian Petroleum to sign contract with small company worth $184.8 million

Major contracts awarded in the vital energy sector raise pressing questions about transparency standards and the integrity of financial procedures.

In this context, the contract—currently being signed—between the Syrian Petroleum Company and a newly established Gulf Arab company with a relatively small capital investment relative to the project, and which has a branch in Syria, stands out as a glaring example of decisions that burden the public treasury with enormous financial obligations without clear competitive justification. The contract is valued at $184.8 million and is currently being finalized.

The crucial questions: Where is the public tender?

The sheer size of the contract raises fundamental questions about the contracting mechanisms employed:

• Lack of competition: How can a contract of this magnitude be awarded through a negotiated agreement? Why wasn't it put out to public tender, which would ensure genuine competition and reveal a fair price for the project, thus protecting public funds?

• Missing evaluation mechanisms: Which entity evaluated the technical and financial bids? Where is the scoring system for the bidding companies, their track record, field experience, and price comparisons?

Advance Payment: Millions of Dollars Without Sufficient Guarantees?

The clause concerning financial payments raises serious concerns regarding the protection of company funds:

• The 15% Payment: The contract grants the contractor an advance payment of 15%, amounting to approximately $27,720,000, payable within just fifteen days of the invoice date.

• Accountability: Who approved this enormous advance payment? What are the actual bank guarantees backing this liquidity? And who guarantees its full repayment in the event of project failure or significant delays?

• The “Early Payment Discount” Precedent: A Formal Gain for the Contractor

The contract includes an unusual clause in sound contractual practices: a so-called “early payment discount” of only 0.05% (half a percent).

• The Paradox of Numbers: The Syrian Petroleum Company is demanding an expedited payment of tens of millions of dollars in exchange for a paltry discount of no more than $92,400, even when calculated on the entire contract value.

• The Suspicion of Detailing: This clause raises serious questions: Who drafted this unusual condition, and in whose interest was it tailored in such a way that burdens the treasury for the benefit of the other party?

The Fixed Price: A Backdoor to Increases

The contract text describes its value as fixed and unchanged, yet it then opens the door wide to demands for financial increases if certain costs rise by more than 15%.

• The Unfair Equation: This clause directly challenges the Syrian Petroleum Company: Is the price truly fixed as the contract text claims, or is the principle of fixed prices applied exclusively to the Syrian Petroleum Company's obligations, while increases remain available and permissible for the contractor at the first sign of price fluctuations?