Gulfsands provided the following update on oil production in Syria.
As previously reported earlier, Gulfsands Petroleum was instructed by the Syrian Oil Ministry to reduce Block 26 production in line with reduced availability of crude storage capacity within the country. In addition, routine refinery maintenance operations are currently underway within Syria, with the result that the Company has been instructed by the Syrian authorities for the time being to continue to confine Block 26 gross daily production to approximately 6,000 barrels of oil per day ("bopd"). It is expected that this reduced level of production will continue until the end of October at the earliest and therefore average Block 26 gross production for the month is anticipated to be approximately 6,000 bopd.
The Company and its partner in the Block 26 joint venture, Sinochem, have received payment in full for all production through the end of July. Receipt of payment for August production (average 24,112 bopd) would routinely have been expected in the course of the past week but at the date hereof remains outstanding.
In the context of the inevitable short term disruption occasioned by the EU imposition of sanctions on Syrian oil exports, the Board anticipated some corresponding dislocation to the historical pattern of production and payment. The Company's strong cash position means that it is well-placed to manage the consequential short term diminution in revenue.
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