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Rebels in Syria claim control of resources

By BEN HUBBARD, CLIFFORD KRAUSS and ERIC SCHMITT

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BEIRUT » Islamist rebels and extremist groups have seized control of most of Syria's oil and gas resources, a rare generator of cash in the country's war-battered economy, and are now using the proceeds to underwrite their fights against one another as well as President Bashar Assad, U.S. officials say.

While the oil and gas fields are in serious decline, control of them has bolstered the fortunes of the Islamic State in Iraq and the Levant, or ISIL, and the Nusra Front, both of which are offshoots of al-Qaida. ISIL is even selling fuel to the Assad government, lending weight to allegations by opposition leaders that it is secretly working with Damascus to weaken the other rebel groups and discourage international support for their cause.

Although there is no clear evidence of direct tactical coordination between ISIL and Assad, U.S. officials say that his government has facilitated the group's rise not only by purchasing its oil but by exempting some of its headquarters from the airstrikes that have tormented other rebel groups.

The Nusra Front and other groups are providing fuel to the government, too, in exchange for electricity and relief from airstrikes, according to opposition activists in Syria's oil regions.

The scramble for Syria's oil is described by analysts as a war within the broader civil war, one that is turning what was once an essential source of income for Syria into a driving force in a conflict that is tearing the country apart.

"Syria is an oil country and has resources, but in the past they were all stolen by the regime," said Abu Nizar, an anti-government activist in Deir el-Zour. "Now they are being stolen by those who are profiting from the revolution."

He described the situation in his oil-rich province as "overwhelming chaos."

The Western-backed rebel groups do not appear to be involved in the oil trade, in large part because they have not taken over any oil fields.

Syria was once an important supplier of oil to Europe, and attracted international oil companies like Royal Dutch Shell and Suncor to develop its fields. Declining even before the anti-Assad uprising began, the oil industry has taken a beating since, with production down to no more than 80,000 barrels a day at the end of 2013 from about 400,000 barrels a day in 2011.

Violence has damaged pipelines and other infrastructure, aggravating energy shortages and leaving the country heavily dependent on imports from its allies.

As the war has progressed, rebel groups have seized control of the oil and gas fields scattered across the country's north and east, while Kurdish militias have taken over areas near the border with Iraqi Kurdistan.

Filling the void left by the government's withdrawal is a Wild West-like patchwork of local efforts to try to wring any possible profit from the remnants of the oil industry. In some areas, locals have used primitive methods to extract usable products from crude they drain from pipelines or storage tanks, often causing environmental and health problems in their communities.

Elaborate trade networks have also evolved, with oil being smuggled across borders in plastic jugs and transported by trucks and on donkeys into Iraq and Turkey.

"The government practically doesn't control anything anymore," said Dragan Vuckovic, president of Mediterranean International, an oil service company that operates across the Middle East and North Africa. "The oil is controlled by crooks and extremists. They sell it for a bargain wherever they can find a buyer."

Oil has proved to be a boon for the extremists of ISIL, who have seized control of most of the oil-rich northern province of Raqqa. The group typically sells crude to middlemen who resell it to the government but sometimes sells it directly to the government, said Omar Abu Laila, a spokesman for the rebels' Supreme Military Council.

"Selling the oil brings in more cash, so why not sell it to the regime, which offers higher prices?" he said.

A U.S. official said the United States had received multiple credible reports that the Syrian government had purchased crude from ISIL that was delivered in tanker trucks from areas the group controls to behind Syrian government lines.

The official also said Assad's government had refrained from bombing the group's headquarters in Raqqa and elsewhere, although their locations are well known and clearly marked with black flags and banners.

A second U.S. official said that while Assad's government is growing ever more desperate for oil, ISIL is becoming increasingly independent of wealthy donors in the Persian Gulf and other funding sources. As the group has gained control of more territory, it has been able to sustain its operations through a combination of oil revenues, border tolls, extortion and granary sales, the official said.

While other U.S. officials discounted the possibility of tactical military cooperation between ISIL and Assad's government, they said that Syrian intelligence had almost certainly infiltrated opposition groups, including ISIL and the Nusra Front, to track their activities.

"The Syrian regime is as Machiavellian as they come, and there is little it won't do to hold on to power," said a U.S. counterterrorism official. "If the regime could strike a tactical accord with an enemy faction to achieve its larger strategic goals, it probably would."

Denied access to Syria's oil regions, Assad's government has become increasingly dependent on its foreign allies and imports most of its fuel from Iran and Iraq, while Hezbollah smuggles diesel and gasoline over the border from Lebanon, according to regional oil experts. The opposition also accuses Syria's Kurds of providing the government with oil.

While rebel oil revenues are small by world market standards, they can help groups exercise local power as well as finance their operations.

"Even sold at discounted prices, this oil could be generating significant revenue for rebels to arm themselves," said Badr H. Jafar, chairman of Crescent Petroleum, a regional oil and gas company based in the United Arab Emirates.

The politics of the local oil trade can be complex, insiders say. When the Nusra Front and other rebel groups took over a natural gas facility in the northern province of Hasaka, they sought to cut the supply to a government facility, said Amer Abdy, a local activist.

But local tribal leaders objected, saying that would simply invite government airstrikes to destroy the plant. So they brokered a deal to keep a limited amount of gas flowing so the area would not be bombed, Abdy said.

When the government first withdrew from the oil fields of Deir el-Zour province in the country's east, said Abu Nizar, the activist there, rebel brigades and local tribes took control of wells and sold or tried to refine whatever oil they could extract to buy arms. Recently, however, most of the area's rebel brigades have left the administration of the wells to an Islamic legal commission set up to run local affairs, he said.

One facility the group controls is a natural gas plant that feeds a major power station near Homs that is still controlled by the government.

"We can't cut off the gas because it would lead to a power cut in a large part of Syria," Abu Nizar said, adding that he hoped the new commission would effectively manage the area's resources.

"Let's be honest. Some of the wells were used to arm the rebels and to fund aid operations," he said, "but unfortunately the majority were robbed and exploited by thieves."






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