LONDON (Reuters) - Sanctions on Syria’s oil sector are squeezing the country in the short term but production and exports are likely to resume once Syrian oil companies find new Asian partners to buy their oil, a Gulfsands executive told Reuters.
Gulfsands, which sources over 90 percent of its output from Syria, has shut down production there along with oil major Royal Dutch Shell and Canada’s Suncor Energy due to the latest set of EU sanctions.
“If I could find an angle to sue the British government and the European Union, I would do it. Sanctions do not work -- look at Iran, look at Iraq,” Gulfsands’ President Mahdi Sajjad said in an interview this week.
The company declared force majeure earlier this week after the EU added Syrian state-owned firms such as GPC to a blacklist, although the company continues its exploration activities.
Sajjad said that Syrian companies will likely resume pumping oil from joint sites without the presence of foreign partners in a move which he said would allow oil revenues to keep flowing to President Bashar al-Assad’s embattled government.
“They (sanctions) have partly succeeded as Syrians have struggled to export oil but I think they are going to try to find a way to keep producing. There are companies in India, South Korea, Russia and China interested in buying the oil and they will make it possible to ship oil east of the Mediterranean,” he said.
Syria is a relatively small producer, pumping less than 1 percent of daily global production but this accounts for a vital portion of government earnings, which Western powers say could be used by the government to crackdown on opposition.
Sajjad, a founding member of Gulfsands who helped lead the firm into Syria in the early 2000s, said that the company is seeking to buy regional production assets in the next two-three months, adding that likely targets are in Tunisia, Morocco, Egypt and Oman.
“We need to be a bit aggressive. Our strategy is to try to find some assets through acquisition or merger,” he said adding that he expects to buy in the next two-three months.
He said the fact the company had no debt meant it would be able to raise enough capital to buy assets worth over $100 million.
In the long term, Sajjad said Gulfsands will remain interested in Syria because of offshore exploration blocks and because of its potential as a future corridor for Iraqi oil.
OPEC member Iraq has an official goal to ramp up production capacity to 12 million bpd by 2017 as it rebuilds after years of war and economic sanctions.
“Iraq will always have to look to Syria as a future transit point to deliver to Europe. There’s too much risk to the region for it all to go through the Straits of Hormuz,” he said, referring to the key export channel for Gulf oil.
The firm also plans to participate in tender rounds for exploration blocks in Iraq and Oman in 2012, he said.
Reporting by Emma Farge; editing by Keiron Henderson