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Syria Oil Embargo
Syria Oil Embargo

Syria Oil Embargo

(Dp-news)

Agencies- Gulfsands Petroleum Plc in London said on Monday that Syrian authorities had instructed it to continue to limit Block 26 gross daily production to 6,000 barrels of oil per day, pointing to routine refinery maintenance in Syria.

According to Reuters, Gulfsands Petroleum Plc said it had not yet been paid for its August output in Syria, escalating the British firm's problems in the country after the oil ministry last week ordered it to reduce production.

The company said it had been paid in full for production through to the end of July, adding that it had a strong cash position and was therefore well-placed to cope with the short-term loss of revenue.



Gulfsands, which produces over 90 percent of its total output in Syria, said on Monday it had expected payment for August output of around 24,112 barrels of oil per day last week.

The Syrian Oil Ministry last week told Gulfsands to reduce production at its Block 26 licence due to a shortage of crude storage capacity in the country.

The company Gulfsands said this reduced level of output was expected to continue until the end of October at the earliest, putting average Block 26 production for the month at 6,000 barrels of oil per day.

Gulfsands warned last month that popular unrest in the country meant its production outlook was uncertain. It also last month reported a first-half profit after tax of $31.2 million, an 87 percent jump on the same period in 2010, boosted by higher oil prices.

Regarding Syria`s Oil and in Canada, Kulczyk Oil Ventures Inc. ("Kulczyk Oil", "KOV" or "the Company") in Calgary, Alberta, announces on Oct. 17th that Loon Latakia Limited ("Loon Latakia"), an indirect wholly-owned subsidiary of KOV, has suspended current operations in Syria.

As a result of KOV suspending its exploration activities in Syria and according to Market Watch Wire report on Monday, the drilling of the Itheria-1 well, the first exploration well being drilled by the Company and its joint venture partners on Syria Block 9, has been suspended at a depth of 2,072 meters.

The original planned target depth of the Itheria-1 well was 3,256 metres. The well was designed to evaluate multiple zones within a large structure with four-way dip closure defined by 3D seismic in an area approximately 200 kilometers due east of the City of Latakia. The Affendi Sandstone of Ordovician age, the first objective encountered, was penetrated at a depth of approximately 1,470 meters and did not have sufficient porosity or permeability to be a potential reservoir.

Two other potential reservoirs, the Ordovician Khanasser Sandstone and the Middle Cambrian Burj Carbonate are expected to occur below the suspended depth. The geological and petro-physical information obtained thus far at Itheria will now be assessed to review the prospective of the deeper objectives in Itheria and in the nearby Bashaer prospect.

The need to assess, together with an increasingly more difficult operating environment, has resulted in a suspension of exploration activity.

As a result of the current operating conditions in the country, KOV requested an extension of the first exploration period under the Block 9 Production Sharing Contract ("Block 9 PSC") which was refused. The Block 9 PSC remains in effect and discussions with the Syrian government authorities concerning Block 9 are continuing. In the meantime, KOV will continue to monitor operating conditions in Syria to assess when, and if, a recommencement of its Syrian operations is possible.

Loon Latakia holds a participating interest of 50% in the Block 9 PSC which provides the right to explore for and, upon fulfillment of certain conditions, to produce oil and gas from Block 9, a 10,032 square kilometer (2.48 million acre) area in northwest Syria.

In September 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.

In August, the Gulfsands Petroleum Plc Company clarified its links with Syria's President al-Assad government in a move designed to defuse media reports and criticisms from pressure groups about its activities in the conflict-torn country. Syrian tycoon Rami Makhlouf, a cousin of the president and a focus of the protests, owns a 5.7 percent stake in Gulfsands.

As for Kulczyk Oil; it is an international upstream oil and gas exploration and production company with a diversified portfolio of projects in Brunei, Syria and Ukraine and with a risk profile ranging from exploration in Brunei and Syria to production and development in Ukraine.

In Syria, KOV holds a participating interest of 50% in the Syria Block 9 production sharing contract which provides the right to explore for and, upon fulfillment of certain conditions, to produce oil and gas from Block 9, a 10,032 square kilometer (2.48 million acre) area in northwest Syria. The Company has an agreement to assign a 5% ownership interest to a third party which is subject to the approval of Syrian authorities, and which, if approved, would leave the Company with a remaining effective interest of 45% in Syria Block 9.

The main shareholder of the Company, Kulczyk Investments S.A. owns approximately 47.6% of the issued common shares. Kulczyk Investments S.A. is an international investment house founded by Polish businessman Dr. Jan Kulczyk.

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