London (Platts)--22Feb2013/924 am EST/1424 GMT

Syrian crude production fell to 153,000 b/d in October last year from around 400,000 b/d in March 2011 when the conflict in the country began, with some 220,000 b/d of production shut in as of November 2012, the US Energy Information Administration said in a report released late Thursday.

"Average oil production from 2008 to 2010 was stable at approximately 400,000 b/d, but since the combined disruptions of military conflict and economic sanctions began the average dropped noticeably," the agency said.

"Syria's oil fields remain largely unaffected -- in terms of damage from fighting and sabotage -- but limited opportunities to export crude and other liquids, and limited domestic refining capacity, have resulted in shut-in production."

Citing various reports, the EIA said Syria's oil minister had pegged the direct and indirect costs of war to the country's oil industry at some $2.9 billion as of October last year.

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"A large portion of this total reflects the loss of Syria's oil exports, which have been limited by escalating sanctions by the United States, European Union, and others. Additionally, domestic energy infrastructure -- such as railway networks, oil pipelines, and refineries -- is frequently the target of attacks, leaving many areas of the country without access to vital petroleum products," it said.

The agency also noted that, "according to the Syrian government, damage to the country's energy infrastructure totaled approximately $220 million through the end of October 2012, with $146 million with of damage to the electricity sector and more than $70 million worth of damage to oil infrastructure."

"Regionally, the continued violence threatens to derail Syria's ambitions of becoming an important energy transit country to its neighbors, the Mediterranean, and Europe," the EIA said.

Domestically, the damage to energy infrastructure and limitations on imports of petroleum products make it difficult for the country to meet internal demand, it said.

Furthermore, the agency said, uncertainty over the future of Syria's energy sector is likely to delay any decisions on investments not already prohibited under the current sanctions regime.

"Against this backdrop, Syria's energy sector is in a state of disarray, and the current conflict threatens to set Syria's energy sector back by years," it said.

--Margaret McQuaile, margaret_mcquaile@platts.com
--Edited by Maurice Geller, maurice_geller@platts.com

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