Russian Investments: The State of Play After Bashar al-Assad

Following the start of the Syrian conflict in 2011 and the subsequent imposition of large-scale sectoral sanctions on the Syrian regime, most foreign investors swiftly withdrew from the country. This pullback was felt most in the energy sector; Europe’s Shell, Total, and Gulfsands, India’s ONGC, and China’s CNPC ceased operations completely and left Syria.

To exploit the gap left by these exits and capitalize on its decisive military intervention in September 2015, Russian companies signed profit-sharing agreements with Assad’s regime, particularly in sectors of long-term strategic value. 

Although Russian taxpayers funded both the military and economic support, Putin’s personal allies seemed to be the ultimate beneficiaries. By 2024, Russian investments in Syria, closely tied to the Kremlin, had focused primarily on energy and extractive sectors, including phosphate mining.

The collapse of the regime—long considered a guarantor of Russian interests in the region—has put existing contracts and investments into question. Russian companies, especially those tied to oligarchs close to President Vladimir Putin, now face an uncertain future as new actors emerge to fill Syria’s political and economic void.

Sectoral Distribution of Russian Investments

The Observatory for Political and Economic Networks (OPEN) had begun mapping Russian business activities in Syria by economic sector before Assad’s downfall. Analysis revealed that most Russian companies were either marginal actors or completely dormant, positioned to benefit from reconstruction efforts that were expected to accelerate once the conflict stabilized. With the sudden regime change, these expectations are now in jeopardy.

According to the sectoral distribution of Russian investments in Syria, most companies are licensed to operate in energy, construction, and mediation, with some Russian companies also playing a role in recruiting Syrian nationals into the Russian military as mercenaries, many of whom were sent to fight in Libya.

Among all the Russian players active in the Syrian economy, however, two oligarchs close to the Kremlin dominated Russia’s economic involvement: Gennady Timchenko and the late Yevgeny Prigozhin, through front companies.

STG: Key Contracts in Question

Stroytransgaz (STG), in which Gennady Timchenko—a Russian billionaire oligarch and close Putin associate —holds a controlling stake, is a major player in Syrian infrastructure and energy. Its subsidiaries, STG-Engineering and STG-Logistics (both sanctioned by the European Union in 2023) had secured long-term contracts with the Assad regime, including:

A 49-year agreement starting in 2019 to manage and invest $500 million in the Port of Tartous.

A 15-year contract starting in 2020 to invest in the Al-Thawra oil fields (Block 22).

A contract with the General Organization for Chemical Industries in Syria to operate and invest in fertilizer plants in Homs, with durations ranging between 25 and 40 years.

A 50-year contract in 2018 to invest in the Khenifis and Sharqiyah phosphate mines near Palmyra, allocating 70% of sales revenue to STG, with 30% going to the Syrian state (at the time, the Assad regime).

Wagner Group: A Shattered Legacy

The Wagner Group, a private militia group founded by the late Yevgeny Prigozhin, had deep economic and military ties in Syria. Prigozhin’s companies secured lucrative contracts in exchange for Wagner’s military support to the Assad regime. These included:

Evro Polis: A contract granting 25% of revenues from oil fields recaptured from rebel control.

Kapital LLC: A 2020 agreement to explore Offshore Block 1 in the Mediterranean.

Mercury: A 2019 agreement for petroleum exploration, development, and production in Blocks 7 and 19 in northeastern Syria.

Velada: A 2019 agreement for petroleum exploration and production in Block 23, north of Damascus.

Implications for Russia and New Beneficiaries

Prigozhin’s death in August 2023 had already cast doubt on the continuity of his operations. Now, with Assad’s regime gone, the future of these contracts is even more precarious than that of Timchenko’s. 

Companies militarily involved in the conflict, such as those linked to Wagner, Redut, and Moran Security Group, will almost certainly cease to operate instantly, as with Assad’s downfall their safety can no longer be guaranteed and there are likely fears of retaliation due to their involvement in the conflict on the regime’s side and the numerous human rights abuses they have been accused of.

The future of business contracts remains uncertain. While the CG has shown a tendency to make decisions on major issues—such as the taxation system—it may adopt varying positions on long-term contracts based on several factors. These factors include: whether the Kremlin will help lift UN sanctions on HTS and its leader; the perceived legality of these investments by CG authorities; and the fate of Russian fighters currently stationed in Syria.

At least for the time being, the CG has shown patience toward Russia, with de-facto leader Ahmad al-Sharaa emphasizing his leadership's efforts to avoid provoking Russia, providing an opportunity for Moscow to reassess its relationship with Syria in a way that serves mutual interests.

Russian authorities seem to have understood these statements as signals from the new Syrian administration that they are interested in Russia’s continued presence, as expressed by both Russian Foreign Minister Sergei Lavrov and Russian Permanent Representative to the UN Vassily Nebenzia.