Royal Dutch Shell PLC said it will pull out of Syria following the European Union's imposition of tougher sanctions against the regime of the country's embattled President Bashar Al-Assad.
"Shell will cease its activities in Syria in compliance with sanctions," said a company spokesman. "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 Shell statement underlined concerns expressed by United Nations High Commissioner for Human Rights Navi Pillay who called for international action to protect Syria's civilian population.
Pillay told an emergency session of the UN Human Rights Council that more than 4,000 people have been killed, including 307 children, in Al-Assad's crackdown on unrest since March. More than 14,000 people are believed to be held in detention.
Shell has exploration interests in southern Syria, in addition to interests in three production licenses in the country, amounting to about 40 oil fields. In 2010, Shell's share of production stood at 20,000 boe/d.
Shell's statement followed a decision by the EU to tighten its existing sanctions against Syria's energy and financial sectors in order to punish the Al-Assad regime for its crackdown on dissidents.
In issuing its new directives, the EU "reiterates its condemnation in the strongest terms of the brutal crackdown by the Syrian government which risks taking Syria down a very dangerous path of violence, sectarian clashes and militarization."
Other European oil companies operating in the country, including Total SA and Gulfsands Petroleum are thought likely to follow Shell's lead. Total did not respond to media enquiries, while a spokesperson for Gulfsands said the firm would "comply with all of the latest EU sanctions."
In addition to Shell, the new measures target the country's state-owned General Petroleum Corp. and Syria Trading Oil (Sytrol).
The sanctions target Syria's "energy, financial, banking, and trade sectors and include the listing of additional individuals and entities that are involved in the violence or directly supporting the regime."
The EU measures include bans on exporting gas and oil industry equipment to Syria, trading Syrian government bonds and selling software that could be used to monitor internet and telephone communications.
Under the additional sanctions, EU ministers agreed to refrain from providing concessional loans to Syria—credit at lower rates and longer grace periods than what is offered by the markets.
The EU, which has already passed nine rounds of sanctions against Syria, also added 12 more individuals and 11 more entities to its blacklist of people and companies hit by assets freezes and travel bans.
The EU's earlier embargo on oil exports from Syria forced the country to reduce production to about 250,000 b/d from 380,000 b/d. The Assad regime has failed to find any new customers for its crude.
Although Syria is a small crude producer, the loss of its supplies has already been felt in the global oil market where traders report that the cost of Russia's Urals, which is similar in quality to some of Syria's oil, has surged to unusually high levels against Brent crude.
In addition to its loss of export revenues from oil, Damascus has also had troubles importing diesel and other refined products. Those troubles will be compounded by the new round of EU sanctions which blacklisted Sytrol, the country's traditional source of fuel imports.
US President Barack Obama welcomed the EU's announcement, which also included new sanctions against Iran, as a signal of the world community's resolve to address what he termed "the assault on the fundamental rights of the Syrian people."
At a Senate committee hearing on Iran sanctions, Under-Secretary of State for Political Affairs Wendy Sherman said the downfall of President Assad, a critical ally of Tehran, is just a matter of time.
"The international environment is changing on a daily basis. And probably one of the most significant things that will happen sometime in the near future is a change in Syria. Iran really has only two allies left, Syria and Hezbollah. And when indeed Basher al-Assad steps aside, which he most undoubtedly will do, it's just a matter of when, not if, Iran will lose one of its last proxies in the world," Sherman said.
More Oil & Gas Journal Current Issue Articles
More Oil & Gas Journal Archives Issue Articles
View Oil and Gas Articles on PennEnergy.com
