US imposes sanctions on Syria's petroleum industry

US President Barack Obama Aug. 18 signed an Executive Order imposing additional sanctions against Syria’s government, freezing any of its assets in the US, and banning the import into the US of petroleum or petroleum products of Syrian origin.

“This EO…bans US imports of Syrian-origin petroleum or petroleum products; prohibits US persons from having any dealings in or related to Syria’s petroleum or petroleum products; and prohibits US persons from operating or investing in Syria,” Obama said.

In a letter to the US Congress explaining his order, Obama said the situation in Syria constituted “an unusual and extraordinary threat” to the national security, foreign policy, and economy of the US.

The US Department of the Treasury identified additional entities of Syria’s government as falling under the new EO. These included:

• State-owned General Petroleum Corp., which controls Syria's oil and gas industry and is responsible for the exploration, development, and investment of Syria's oil and gas exploration activities.

• Syrian Petroleum Co., which oversees Syria’s upstream oil production and development.

• Syrian Co. for Oil Transport, which manages the country’s domestic pipeline system and is responsible for transporting all Syrian crude and petroleum products. SCOT manages Syria’s three major oil export-import terminals—Baniyas, Tartous, and Latakia.

• Syrian Gas Co., which bears responsibility for processing, transporting, and marketing Syria's gas.

• Syria's state-oil marketing firm SYRTOL, responsible for selling Syria’s crude to foreign buyers.

US DOT Sec. Tim Geithner said, “The president took decisive action today to add force to his call for Bashar al-Assad to step down by imposing far-reaching sanctions targeting the entire government of Syria and its energy sector. This order strikes at a crucial revenue stream for Syria's government and, together with our continuing targeted sanctions, will disrupt the Assad regime's ability to finance its campaign of violence against the Syrian people.”

In 2010, the International Monetary Fund estimated that Syria’s government earns $3 billion/year from oil and gas revenues.

Most of Syria’s oil is used domestically, but it exports 150,000 b/d, 95% of which goes to Europe, primarily to Italy, the Netherlands, France, and Germany.

Obama’s EO coincided with a joint call from UK Prime Minister David Cameron, French President Nicolas Sarkozy, and German Chancellor Angela Merkel for the departure of Al-Assad.

“France, Germany, and the UK reiterate their utter condemnation of this bloody repression of peaceful and courageous demonstrators and the massive violations of human rights which President Assad and his authorities have been committing for months,” the joint statement said.

“We are actively supporting further strong EU sanctions against the regime of President Assad,” the statement said.

The 27-member European Union made the same call, saying it would impose further sanctions on the Al-Assad regime.

A list of options will be presented to a meeting of senior European diplomats on Aug. 19 that will include measures to significantly extend current sanctions beyond named individuals and companies.

In Syria, meanwhile, European oil companies are reportedly continuing multimillion dollar trade with Syria, providing the Al-Assad regime with a key source of funds.

Traders reported that Total SA had sold Repsol YPF SA a 30,000-ton cargo of naphtha, valued at $30 million, which is set to load from Syria's Banias refinery on Aug. 22. Both companies declined to comment.

Several traders said that Total and Repsol YPF also won a tender for the sale of two, larger crude oil cargoes earlier this week. The companies also declined to comment on these reports.

Earlier this week, Syria’s Oil Minister Sufian Allawi said a promising gas field had been discovered in the central governorate of Homs.

“The first wells were drilled at Qara in Homs governorate and the flow rate is 400,000 cu m/day,” said Allawi.

“This discovery opens new perspectives in the region of Qalamun and the Syrian company will continue its drilling,” said Allawi, who added that the new field lies in the Dau basin.

Syria’s gas production has reached 30.29 million cu m/day, up by 3 million cu m/day since last year, according to Allawi who also said that Syria’s oil production stands at 380,000 b/d.

Contact Eric Watkins at hippalus@yahoo.com.

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