Syria-focused oil independent Gulfsands Petroleum has warned investors that the political situation in the country and international sanctions may affect production.
“Uncertainty now exists as to the production outlook for the remainder of the year as a result of sanctions imposed by the US and the EU,” the company said in a statement released today.
The company says it has halved its output on instruction from the Syrian government. While Syrian oil is likely to find new buyers for its oil, logistical issues may reduce the capacity for supply and buyers are likely to demand a discount from rates paid by EU countries.
The news of Gulfsands’s production conflicts with the prediction of the International Energy Agency in its last report, in which the consumer’s executive said it does “not believe that the sanctions currently in place will affect crude oil production volumes from Syria, which the IEA estimates at 332,000 barrels a day in August.”
However, the ban on dealing in Syrian crude may “exacerbate already-declining mature production in the country,” the IEA said.
Gulfsands said current production is fluctuating, but this was having a “modest” impact on financials.
Since mid-March when protests erupted in Syria, the company has repeatedly said that its operations in the country have continued without interruption.
Earlier this month, the European Union, the biggest buyer of Syrian crude oil, banned imports of the country’s oil to put economic pressure on President Bashar al-Assad, following similar sanctions imposed by the U.S. in August.
