Royal Dutch Shell PLC (RDSA) 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.
Royal Dutch Shell PLC (RDSA) 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."
The European Union Friday expanded measures against Assad's rule to include the
Syrian oil and gas industry, including the state-owned General Petroleum Corp.
and Syria Trading Oil, or Sytrol.
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.
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