State-controlled Chinese group Sinochem caught in EU sanctions; Syria will continue to produce oil from the fields.
By REUTERSAn 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.RELATED:'No substitute for US leadership on Syria''Syria behind attack on French troops in Lebanon'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.
