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Trump Calls for Defense, Use of Syrian Oil Fields – The Wall Street Journal

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Former administration officials said President Trump’s oil plan raises a host of legal, technical and diplomatic issues.


Photo:

Manu Brabo for The Wall Street Journal

By

Michael R. Gordon and

Timothy Puko

WASHINGTON—President Trump said that he is planning to keep a small number of troops in northeast Syria to protect the oil fields there and suggested that an American company might help the Syrian Kurds develop the oil for export.

“I always said if you’re going in, keep the oil,” Mr. Trump said at a cabinet meeting Monday. “We’ll work something out with the Kurds so that they have some money, so that they have some cash flow. Maybe we’ll get one of our big oil companies to go in and do it properly.”

Former administration officials said Mr. Trump’s plan raises a host of legal, technical and diplomatic issues. And industry analysts say it is unlikely to draw any interest from the oil companies it would need to succeed.

Rex Tillerson,

a onetime Exxon Co. CEO, had considered the idea when he was secretary of state only to conclude there were formidable legal barriers, said

Brett McGurk,

who served as the administration’s special envoy to the coalition fighting Islamic State until he resigned in December.

“Oil, like it or not, is owned by the Syrian state,” Mr. McGurk said Monday in an appearance at the Foundation for Defense of Democracies, a Washington think tank. “Maybe there are new lawyers, but it was just illegal for an American company to go and seize and exploit these assets.”

Mr. McGurk said that the only way to export the oil legally, the State Department concluded at the time, was to have an arrangement in which the money was put in escrow for use by the Syrians after the civil war was over, an arrangement that would have involved Russia and the Assad government.

Mr. Tillerson couldn’t immediately be reached for comment.

Fuad Hussein, Iraq’s finance minister, said that his government hadn’t yet been approached about Mr. Trump’s plan, which U.S. officials said would involve exporting Syrian oil, possibly produced with the help of an American company, through Iraq.

“This is new. It must be discussed in Baghdad, in Erbil,” Mr. Hussein said in an interview, referring to the capital of the semiautonomous Kurdish region in Iraq. “This needs a lot of discussion.”

The White House hasn’t provided details of Mr. Trump’s troop plan, which has supplanted his original order to remove all of the 1,000 troops from the northeast part of the country. Defense Secretary

Mark Esper

said earlier Monday that a small U.S. force, which military officials said could number up to 300, would remain in northeastern Syria after other U.S. troops are withdrawn under Mr. Trump’s orders.

Proponents say safeguarding the oil provides a way to maintain the U.S. relationship with the Kurdish-led Syrian Democratic Forces, keep up the fight against Islamic State and provide the Kurds with an alternative to selling oil to middlemen who transfer it to President

Bashar al-Assad’s

regime.

President Trump during a cabinet meeting on Monday at the White House.


Photo:

Pablo Martinez Monsivais/Associated Press

Kurds and Mr. Trump’s critics have charged the U.S. withdrawal represents the abandonment of a longtime ally.

Mr. Trump long has advocated the control and sale of foreign resources, saying it could help American deployments pay for themselves.

Mr. Trump’s White House staff researched the possibilities in several conflict zones, doing the deepest such assessment of Afghanistan. Potentially large mineral reserves there have gone untapped because of conflict, poor infrastructure and ineffective governance. Those problems would limit opportunities for the U.S. to benefit from increased mining and drilling by discouraging U.S. firms from working there, the assessment concluded, echoing others.

Any U.S. government attempt to benefit from resources in previously examined areas likely would be hamstrung, because Washington doesn’t operate a state-owned energy or mining company, said a person familiar with these assessments. The government would have to rely on enticing a private U.S. business to enter a conflict zone, a task even more challenging when global oil prices are relatively low and security in the region is in doubt.

Mr. Trump previously has complained that the U.S. didn’t take oil from Iraq following the 2003 American-led invasion.

Syria’s oil and gas fields in Kurdish-held areas have long figured in U.S. strategic plans to influence developments in the region. American officials have hoped that they and the Kurds could maintain control of that oil-rich territory, building leverage that could be used if political discussions about the future of Syria eventually are held. At a minimum, the U.S. has wanted to keep the oil fields out of the hands of Islamic State militants and the Russians.

But Mr. Trump’s talk about bringing in an American company to develop the oil fields represents a new concept, which follows conversations with

Sen. Lindsey Graham

(R., S.C.).

Syria’s crude production had once been as high as 600,000 barrels a day, but fell to about 400,000 barrels around the outbreak of the war, according to data from an arm of the U.S. Energy Department. It quickly dropped again, by more than half, and Syria produced only about 40,000 barrels a day during the three years Islamic State controlled the region, from 2014 to 2017, according to those figures. Following the U.S-led campaign against the militant group, production fell by half again, before rebounding to about 30,000 barrels a day last year.

The only pipelines from the region go west, into territory controlled by Mr. Assad. And exporting the oil through Turkey would be a political nonstarter, given the Kurds’ tensions with Ankara, which considers its military forces to be terrorists.

U.S. officials said the oil could be exported through Iraq. Some of Syria’s lower-quality heavy oil, they say, might be blended with higher-quality Iraqi crude before being sold on the international market. Oil analysts dispute this as unlikely or unprofitable.

A key question is whether a U.S. company would be prepared to invest and develop the Kurdish-held fields given the legal, diplomatic and security complications, along with Mr. Trump’s wavering commitment to keep troops in Syria.

“The biggest fields are in the worst shape,” said

Matthew Reed,

an analyst at Washington-based consulting firm Foreign Reports. “We’re probably talking multibillion-dollar investments that won’t pay off for years, assuming ISIS doesn’t return or Assad doesn’t capture them.”

Trump administration officials assert that the several hundred members of the U.S. special operations forces the Pentagon is planning to send to northeast Syria would be sufficient to secure the oil-rich region if the Americans were working with the Kurdish-led Syrian Democratic Forces and were protected by American air power.

But the security plan, like the rest of Mr. Trump’s plan, remains in progress and faces unanswered questions.

“We have already given up almost the entire perimeter of northeast Syria,” Mr. McGurk said, referring to the withdrawal of the bulk of U.S. troops that is now under way. “And we are now going to hole up in a Fort Apache with a couple of hundred Americans? Let’s not exaggerate that that gives us any influence over the course of events in Syria. That influence has evaporated.”

—Michael C. Bender and Gordon Lubold contributed to this article.

Write to Michael R. Gordon at michael.gordon@wsj.com and Timothy Puko at tim.puko@wsj.com

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