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The head of Gulfsands, the western oil company most exposed to Syria, called for changes to the sanctions to bring outside operators back into the market, boost production and give the country “a chance to get back on its feet”.
John Bell, director of the London-based company Gulfsands Petroleumhe spoke after the rebel coalition demolished Bashar al-Assad’s regime, which has been under sanctions by Western governments since 2011. Gulfsands’ operations are in an area of northeastern Syria long controlled by the Kurds Syrian Democratic Forces (SDF).
Several European and North American companies invested in Syrian oil and gas before the sanctions. But small independent operator Gulfsands was uniquely specialised, referring to its interests in the area known as Block 26 around Al Hasakah as its “core asset”.
The operations, which produced just over 20,000 barrels of oil a day before 2011, are maintained through a 50-50 joint venture with China’s Sinochem.
Bell pointed out that oil production in Syria reached about 400,000 barrels per day before 2011, but now that figure is about 80,000 b/d.
“In the right legal framework with appropriate safeguards, sanctions could be modified to bring international companies back,” he said.
Since the introduction of sanctions, Gulfsands has not received any income from Syrian production. It was also said that SDF elements have been illegally extracting oil from the field since 2017.
The company completed its listing on London’s Aim junior market in 2018 and has since repositioned itself as a buyer of oil assets elsewhere in the Middle East.
Illegal producers have been selling oil from Block 26 at a much lower price than the prevailing market price of around $73 per barrel.
Bell said prices would rise to international levels if Western companies were allowed to return and production in Syria increased. Gulfsands has long proposed a system where outside observers would monitor revenue streams and ensure they go to reconstruction and other humanitarian projects.
“Instead of 80,000 barrels a day selling at $15 or $16, make it legal and bring it back to 400,000 a day,” Bell said. “It provides the possibility of speeding up early recovery and investing in real humanitarian programs. It gives Syria a chance to get back on its feet.”
Only the oil and gas industry could generate enough revenue to rebuild Syria, Bell said. He added that rebel groups currently extracting oil use “incompetent practices” that fail to properly manage oil reservoirs.
Other European and North American oil and gas companies with suspended operations in Syria include Shell, which owns 20 percent of Al Furat Petroleum, a Syrian oil producer.
France’s Total has a stake in the Tabiyeh gas project and a 50 percent stake in an oil production operation in Deir Ezzor, eastern Syria. Canada’s Suncor has a 50 percent stake in the Ebla gas field.
Neither company wanted to comment on whether they were involved in attempts to return to the country.
Hayat Tahrir al-Sham, the rebel group that led the offensive that ousted Assad, classified as a terrorist group many Western governments, a factor complicating efforts to reopen trade and investment ties.
Bell said it was still “early” for the company to enter into any formal negotiations to return to Syria, but that it was “monitoring” the situation. He said he expected the new government to honor the existing oil production contract.
The new Syrian authorities have so far not addressed the issue of foreign participation in the oil and gas sector.
The UK Foreign Office declined to comment on any plans to lift sanctions or encourage the return of Western oil companies.
