Sinochem, Gulfsands shut down Syria oil ops

State-controlled Chinese group Sinochem caught in EU sanctions; Syria will continue to produce oil from the fields.

December 12, 2011 12:03
1 minute read.
An oil drilling rig [illustrative]

An oil drilling rig 311. (photo credit: Andrea De Silva / Reuters)

LONDON - Chinese state-controlled Sinochem and UK-listed explorer Gulfsands Petroleum have shut down their oil operations in Syria following European Union sanctions related to the crackdown on the uprising against the rule of President Bashar al-Assad, Gulfsands said.

Although China has resisted sanctions on Syria, Sinochem is bound by EU sanctions since it bought its interest in the Syrian fields by taking over UK-listed Emerald Energy, through which it still owns the assets, a Gulfsands spokesman said on Monday.

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Syrian state-controlled General Petroleum Corporation (GPC) will continue to produce oil from the fields, in exploration block 26, the company said in a statement.

Analysts said the further development of the block would be delayed, postponing expected cashflows.

The Syrian fields are the only cash-generating assets Gulfsands owns, save for a few small interests in the US which it is selling. However, a spokesman said it had $120 million on the balance sheet and no debt.

The company said it would retain a presence in Syria.

Sinochem declined immediate comment.

Gulfsands shares, which have lost more than half their value so far in 2011, were down 7.9 percent at 171.5 pence by 0930 GMT.

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