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The head of Gulf Sands, the Western oil company most exposed to the Syrian crisis, called for changes to sanctions to allow external operators to return to the market, boost production and give the country “a chance to get back on its feet.”
John Bell, Managing Director of the London Company Gulf Sands PetroleumHe was speaking after the rebel alliance He overthrew Bashar al-Assad's regime, which has been under sanctions by Western governments since 2011. Gulf Sands' operations are in a region of northeastern Syria long controlled by the Kurdish-led Syrian Democratic Forces. Syrian Democratic Forces (SDF).
Many European and North American companies invested in Syrian oil and gas before the sanctions. But the small independent operator Gulfsands was uniquely specialized, citing its interests in the area known as Block 26 around Hasakah as its “core asset”.
The operations, which produced just over 20,000 barrels of oil per day before 2011, are run through a 50-50 joint venture with China's Sinochem.
Bell pointed out that Syria's oil production was about 400,000 barrels per day before 2011, but the number now is about 80,000 barrels per day.
He added: “In the right legal framework with the right guarantees, the sanctions can be modified, so that international companies can return.”
Gulf Sands has not received any revenues from Syrian production since the imposition of sanctions. She also said that elements of the Syrian Democratic Forces have been illegally pumping oil from the fields since 2017.
The company ended its listing on London's mini-market Aim in 2018, and has since repositioned itself as a buyer of oil assets elsewhere in the Middle East.
Illegal producers were selling oil from Area 26 at a price well below the prevailing market price of about $73 per barrel.
Bell said prices would rise to international levels if Western companies were allowed to return and Syrian production increased. Gulf Sands has long proposed a system in which outside monitors would monitor revenue streams and ensure they go toward rebuilding and other humanitarian projects.
“Instead of selling 80,000 barrels per day at $15 or $16, you can make that legal and increase production back to 400,000 barrels per day,” Bell said. “It provides the ability to accelerate early recovery and invest in appropriate humanitarian programmes. It gives Syria a chance to get back on its feet.”
Bell said that only the oil and gas industry could generate enough revenue to rebuild Syria. He added that the rebel groups currently extracting oil are using “incompetent practices” and failing to properly manage oil reservoirs.
Other European and North American oil and gas companies that have suspended operations in Syria include Shell, which owns 20% of Al-Furat Oil Company, a Syrian oil-producing company.
The French company Total owns a stake in the Tabiya gas project and a 50 percent stake in the oil production process in Deir ez-Zor, eastern Syria. The Canadian company Suncor owns a 50 percent stake in the Ebla gas field.
None of the companies commented on whether they were involved in repatriation efforts.
It is Hay'at Tahrir al-Sham, the rebel group that led the offensive that ousted Assad Classifying it as a terrorist group by many Western governments, a factor that complicates efforts to reopen trade and investment links.
Bell said it was too early for the company to enter into any formal negotiations about returning to Syria, but it was “monitoring” the situation. He said he expected the new government to respect the current oil production contract.
The new Syrian authorities have not yet addressed the issue of foreign participation in the oil and gas sector.
The British Foreign Office declined to comment on any plans to lift sanctions or encourage the return of Western oil companies.
