Azerbaijan, Baku, Feb.3 / Trend A.Badalova/
Gulfsands Petroleum company (UK) and its 50-percent working partner in Syrian Block 26 fields, Sinochem ceased its production operations in response to the tightening of EU sanctions against Syria, Gulfsands Petroleum reported.
"Following successful testing of the KE102 Appraisal Well, the results of which were announced on 31st January 2012, the Board has decided to cease exploration activity within Block 26 for the duration of the Sanctions," the report says.
The Syrian state-owned oil company General Petroleum Company ("GPC"), which is Gulfsands Petroleum and Sinochem's (Contractor) joint venture partner under the Production Sharing Contract (PSC), has continued since 11 December, 2011 to produce oil from Block 26 at the rate of approximately 4,000 barrels per day. Contractor has received no payment in respect of such production, the report says.
"It is disappointing to be obliged to cease exploration following a recent run of considerable success and with substantial exploration potential still untapped," Gulfsands Petroleum says.
According to the report, the current Exploration Period for the Block 26 PSC expires in August, 2012, PSC's minimum work obligations have long since been fulfilled, it is uncertain whether the remainder of the Exploration Period has also been suspended by the Company's declaration of force majeure.
"However, the Board intends to retain a full exploration capability in country and remains hopeful that, when the present difficult situation is resolved, such capability combined with the previous track record of proven exploration success will be persuasive with the Syrian authorities in extending the Exploration Period to account for the period lost due to the sanctions," Gulfsands Petroleum says.
Gulfsands Petroleum plc is the oil and gas production, exploration and development company with activities in Syria, Iraq, Tunisia, Italy and the U.S.A.
European Union states, which bought most of Syria's approximately 130,000 barrels per day of oil exports, imposed sanctions on Syrian oil on 2 September, following a similar decision by the United States.
According to BP, Syria's proved oil reserves amounted to 2.5 billion barrels in early 2011. In 2010 the country's oil production increased by 2.7 percent to 385,000 barrels per day.