Gulfsands Petroleum has weathered the recent sanctions against the Syrian to make an important discovery in the country.
The Syrian government has instructed Gulfsands to reduce production again sharply, with gross production for October averaging 6,028 barrels of oil per day (bpd) and for November averaging 4,862 bpd.
Sanctions have also affected payments, with Gulfsands taking a payment of $11.4 million ($5.7 million for Gulfsands' account) in late November in partial settlement of oil sales invoiced for the months of August and September, when Gulfsands are owed $23.2 million.
Gulfsands's CEO Mahdi Sajjad has strongly criticised the decision to impose sanctions on Syria's oil exports.
"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," Sajjad told Reuters.
Payments for October are outstanding. "No payment of outstanding amounts is expected in the forseeable future," said the company.
Exploration activity has continued, which Gulfsands says "are not restricted by the recent introduction of additional EU sanctions on oil production. The company has concluded exploratory drilling at its Al Khairat-1 well ("AKR-1") with the discovery of 1,826 bpd at a depth of 1,975 metres.
"Subsequent evaluation of wireline logs has indicated that a 29 metre net oil column has been encountered in AKR-1 with net-to-gross of 100%, average porosity of 21% and average water saturation of 19%.
Based on wireline and testing data, no
oil-water contact has been identified in the well," Gulsands said
in a statement yesterday.
"The resource potential of Al Khairat is typical of near-field satellite closures in the area and could yield 4 million barrels of recoverable oil volumes in the median (P50) case to 15 million barrels in an upside (P10) case."
Gulfsands was forced to invoke force majeure against General Petroleum Company of Syria after the state-owned firm was blacklisted under an ongoing EU sanctions regime. The company has now suspended its share buyback program.