INDUSTRYThe Syrian industrial sector contributed 22 percent of the GDP in 1997 and 20 percent of the labor force in 1996. State-owned organizations dominate heavy industry. Mining and quarrying (mostly oil) generates about 28 percent of gross industrial output, followed by the agro-food and chemical industries. The textiles and clothing industry comes next, and accounts for about 12 percent of industrial output.
MINING.Petroleum is Syria's chief mineral product. Most of the petroleum comes from fields in the northeastern part of the country. Phosphate rock is another important source of income. Phosphate, which is used to make fertilizer, is mined in the Palmyra area of central Syria. The principal limestone quarries are located north and west of Damascus, near the city of Aleppo. Marl is used in the cement industry with quarries near Damascus, Aleppo, and Rastan. Sandstone suitable for glass manufacture is mined in the Palmyra Mountains. The country's other mineral products include asphalt, gypsum, natural gas, and table salt.
OIL.Most of Syria's oil fields are located on the Euphrates Graben, which runs across the northeastern region of the country. The discovery of large crude fields in the mid-1980s boosted the role that oil plays in the Syrian economy. Since this time, output has expanded rapidly and reached a peak of 604,000 barrels per day in 1996. Production has been falling in recent years, because many fields discovered in the 1960s reached maturity. According to the International Energy Agency (IEA), as of 2000, Syria's production was about 520,000 barrels per day, of which some 325,000 barrels per day have been exported, accounting for some 65 percent of export revenue. Because of Syria's old, small, and dispersed oil fields, the EIU Country Report claims that the decline in Syrian oil production will continue in 2001, and most observers agree that the decline will continue for years to come.
Intense exploitation in the late 1980s and early 1990s saw oil production rise rapidly, fuelling economic growth, but at a cost. Fields were damaged as groundwater seeped into reservoirs and reservoir pressure fell, requiring injection projects to maintain pressure. Additionally, harsh government terms caused many foreign oil firms to leave the country. Investors have complained about the restrictive terms for exploration and development in the Syrian oil sector. In fact, international observers have forecasted that Syria will revert to being a net importer of oil within a few years as production declines and domestic consumption rises, unless new, substantial, and financially viable reserves are soon found. Syria exports Syrian Light, a blend of light and sweet crude oils produced from the Deir ez-Zour and Ash Sham fields. The country also exports fuel oil and other products. Syria is a member of OAPEC (Organization of Arab Petroleum Exporting Countries), but not OPEC (Organization of Petroleum Exporting Countries).
The oil exploitation of the 1980s attracted international interest to the Syrian oil sector, and several consortiums (companies formed to undertake an enterprise beyond the resources of any one member) were formed. Companies such as Agip, Bay Oil, Chevron, Conoco, Marc Rich, Shell, Elf, Total, and Veba are the most prominent involved in the sector. The largest of these is the Shell consortium made up of Pecten, Shell, and Deminex. In 1985 the Shell consortium entered a joint venture with the Syrian Petroleum Company (SPC) to create the Al-Furat Petroleum Company. This joint venture produces about two-thirds of Syria's oil output. All Syrian oil, including that produced by foreign companies, is sold on a monthly basis by the state-owned marketing company Sytrol. Since January 1994, Sytrol has had a clause in its term contracts prohibiting customers from re-selling Syrian crudes without written permission from Sytrol. This is intended to curb spot trading in Syrian crudes, especially sales to Israel. The unfavorable contract terms for exploration, development, and poor exploration results have only left 3 (Elf, Shell, and Deminex) out of the 14 companies that were operating in the country in 1991.
Syria's 2 oil refineries are located at Banias and Homs. Total production from these refineries was 242,140 barrels per day in 2001. Syria is planning to construct a third refinery, with an initial capacity of 60,000 barrels per day, at Deir ez-Zour to supply products to the eastern part of the country. The country's major oil export terminals are at Banias and Tartous on the Mediterranean, with a small tanker terminal at Latakia. Tartous is connected through a pipeline to the Banias terminal. The Syrian Company for Oil Transport (SCOT) operates all 3 terminals and is in charge of Syria's pipelines.
SPC has been working to increase Syria's gas production through several projects. The Palmyra area in central Syria is the site of much of this activity, including the development of the Al Arak gas field, which came on stream at the end of 1995. In October 1997 the Syrian government announced the discovery of a large new gas field in the Abi Rabah area of the Palmyra region. One of the main problems for the gas sector is the location of gas in the northeast regions of the country, while the population centers are in the southwest. According to EIU reports, in July 2000 a step to ease the disparity was taken with the announcement that a Dutch company, A Halk Pijpleidingen, had been awarded a contract to construct a US$46 million pipeline from newly developed gas fields in the Palmyra area to the city of Aleppo. The 124-mile pipeline will be used to supply gas to a 1,000 megawatt power station in the city, constructed by Mitsubishi Heavy Industries of Japan. Bids are being measured to build a gas pipeline from Homs to the Mediterranean port of Banias.
MANUFACTURING.Manufacturing accounts for about 6 percent of the value of Syria's production. The main industries are cement, glass, food processing, iron and steel, leather goods, brassware, fertilizers, and textiles. Cotton fabrics, wool, and nylon are Syria's most important manufactures. The textile industry is in Aleppo, Damascus, Homs, and Hamah. Natural silk is produced at Latakia. Technical engineering industries, most of which are in Damascus, are active in producing cement, glass panes, bottles, utensils, pharmaceuticals, plywood, and batteries. The food processing industry produces salt, vegetable oils, cotton cake, canned fruit and vegetables, tobacco, and a variety of dairy products. While manufactured goods made up 10 percent of total Syrian exports in 1998, the well-established textile industry contributed another 10 percent of export earnings and employed one-third of the industrial workforce.
Syrian manufacturing industries grew substantially in the 1960s. The government encouraged industrialization by raising tariffs on imported consumer goods and providing tax exemptions and credit for domestic industries. Therefore, most of the traditional handmade manufactures (damask steel, swords and blades, brass and copper work, wood engravings, gold and silver ornaments, mother-of-pearl inlays, silk brocades) have dramatically decreased since the introduction of industrial processing. Private sector participation in manufacturing has taken off in the 1990s, with the total capital investment in the industrial private sector growing from US$273 million in 1991 to US$735 million in 1995. Of the 1.1 million workers in manufacturing, more than 75 percent are now employed in the private or mixed sectors. While private sector involvement has been limited to the textile, food processing, leather, paper, and chemical industries, the government started to open heavy industry to private investment in areas where the public sector is unable to meet increasing demand.
Read more: http://www.nationsencyclopedia.com/economies/Asia-and-the-Pacific/Syria.html#ixzz2Tho8gE1L