LONDON (Dow Jones Newswires), Dec. 2, 2011
Shell said Friday it will pull out of Syria amid a wave of tighter sanctions against President Bashar al-Assad‘s regime following his violent crackdown on protesters.
A spokesman for the Anglo-Dutch energy giant said: “Shell will cease its activities in Syria in compliance with sanctions. Our main priority is the safety of our employees of whom we are very proud. We hope the situation improves quickly for all Syrians.”
Shell has interests in three production licenses in Syria covering some 40 oil fields, with its share of production in 2010 approximately 20,000 barrels of oil equivalent a day. It also has exploration interests in the south of the country.
Payments from the government for oil produced in the country, to Shell and other companies, have been interrupted as Syria’s cash reserves continue to dwindle. According to Egbert Wesselink of Dutch charity IKV Pax Christi, Shell hasn’t been paid for the last week at least.
He said Shell’s decision to leave Syria was likely due to a combination of sanctions and reduced payments from Syria’s national oil company.
“Shell isn’t really operational there right now anyway. The effect of this will mean oil production will go right down,” said Wesselink, adding that storage facilities at the country’s export terminals are almost overflowing with crude as Syria runs out of markets to sell to.
Syria pumps about 370,000 barrels of oil a day, about 150,000 of it exported, according to the International Energy Agency. Those exports make up about one-third of Syria’s export income–and nearly all of it is sold to Europe.
“Now sanctions are working, the European boycott is effective,” he said. The country had even tried to switch to selling to Asian buyers instead, Wesselink said, but none of them were prepared to take it.
Shipbrokers who track the passage of oil globally said that exports from Syria have been virtually non-existent in the last two months, while Asian buyers spoken to by Dow Jones Newswires this week said they had no interest in lifting the country’s oil.
Copyright (c) 2011 Dow Jones & Company, Inc.
by Alexis Flynn
Dow Jones Newswires
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