The Finanacial Times has reported that Gulfsands Petroleum, a Syria-focussed exploration and production company listed on the AIM market of the London Stock Exchange, agreed to give a portion of its profits from Syrian production to a company controlled by Rami Makhlouf, a cousin of embattled Syrian President Bashar Assad.
Maklouf’s company was already known to have a 5.7% shareholding in Gulfsands via the Al Mashreq Investment Fund, in which he has a majority stake. Maklouf is a serial tycoon in Syria, with interests in most sectors of industry and commerce.
Gulfsands has also reportedly paid Al Mashreq $1 million in fees for unspecified services to Ramak, a holding company for the Maklouf’s family assets. Gulfsands also rents offices in Damascus owned by Makhlouf interests while other Makhlouf-controlled entities are routinely engaged by Gulfsands for operations in Syria.
Gulfsands has defended its ties to Maklouf, pointing out in a statement to the AIM that it has had “constructive commercial relationships” with Makhlouf-connected interests since it first entered Syria in 2000 and claiming in a company statement that it has “behaved at all times with absolute propriety.” The company states it has suspended all shareholder rights to Maklouf-interested businesses and ceased all payments. The company has seen its shares drop to 150p from 400p at the start of the year, with shares down 1.5% on the day’s trading to hit their lowest point since the stock market’s nadir in March 2009.
Maklouf has been slapped with international sanctions after the Assad regime’s brutal crackdown on protestors. More than 2,200 people have been killed during the crackdown, UN High Commissioner for Human Rights Navi Pillay said yesterday.
Pressure has been increasing on the EU to ban the import of Syrian crude, with the body distracted by a sovereign debt crisis that threatens to plunge the Eurozone back into recession and able only to increase the number of individuals and business included in current sanctions.
Gulf sands says operations at it’s block 26 concession in Syria are continuing as normal.
