With Asian economic powerhouses such as China and India aggressively hunting for new sources of energy to fuel their expanding economies, opportunities beckon for sanctions-hit Syria. Syria’s petroleum wealth, although limited by Middle East standards, is attracting the growing interest of oil-hungry Asian nations, even as some American oil majors pull out to minimise their investment risks.

“The majority of Western companies are not interested in investing in Syria because any country that is under sanctions or could face sanctions is going to be regarded as a higher risk,” says Samir Saifan, a Syrian economist. “Naturally, Syria will look for other sources, and they are China, India, Malaysia, and other Asian countries.” Not only Syria is looking. Even the largest Mideast oil and gas producers, such as Saudi Arabia and Kuwait, are eyeing the booming markets of the East, a shift that threatens to weaken Western influence in the region.

Oil production is a vital component of the Syrian economy, generating almost 70 per cent of its export revenues. But output has been in decline for a decade, dropping from around 600,000 barrels per day to 460,000 barrels per day. At the current rate, Syria could be a net oil importer within a decade.

Two years ago, the Bush administration slapped limited sanctions on Damascus, banning the export of all US goods to Syria except for humanitarian supplies. Earlier this month, President Bush renewed the sanctions for another year. The sanctions and political pressure have encouraged some American oil companies to pull out or reduce their presence: US oil giant ConocoPhilips withdrew from Syria in 2004 and Devon Energy of Oklahoma City, Oklahoma,exited last year.

With American companies departing, Russian and Asian firms are filling the gap. Devon Energy sold its interests in Syria to Gulfsands, its partner in a joint exploration contract. Gulfsands then sold 50 per cent of the project to SoyuzNefteGas, a Russian oil and gas company. A Russian company was contracted by the Syrian government in December to build a $2.7 billion oil processing plant in central Syria. In January, an Indian oil and gas major and a Chinese rival won a joint 37 per cent stake in a Syrian oil and gas field in a $573 million deal with Petro-Canada.

Other than economic benefits, Syria stands to gain politically by having the sympathetic ear of Russia and China, two of the five permanent members of the United Nations Security Council, which is presently assessing a draft resolution submitted by France demanding Syria establish formal diplomatic relations with neighbouring Lebanon and demarcate the border between the two countries.

China is the world’s second-largest consumer of petroleum products after the US and is the source of about 40 per cent of world oil demand growth over the past four years, according to the US Energy Information Administration. It will be a heck of a problem meeting its demands. — The Christian Science Monitor