Operator of Syrian oil fields, Gulfsands, receives new financing

Gulfsands, the operator and joint-owner of of a $1.5 billion dollar oil field in Syria, has received a £6.5 million (~$8.7m) financing facility, the company announced on Tuesday. 

The multi-million dollar financing deal will allow the company to operate until at least December 2023. Gulfsands, a London-based oil company, holds only one asset: Syria’s Block 26.

Block 26 is estimated to be valued at around $1.5 billion dollars, according to a July report by Gulfsands. The oil field lies in northeast Syria, under control of the Kurdish-dominated Autonomous Administration of North and East Syria (AANES), and produces only around 20,000 barrels per day without Gulfsands’ involvement.

Gulfsands holds a fifty percent stake in a joint venture between it, Chinese state-owned conglomerate Sinochem and the Syrian government General Petroleum Corporation (GPC). However, due to sanctions imposed on Syria (and GPC) during the country’s civil war, the company abandoned exploration and production in December 2011.

Gulfsands has the production rights to the two oil fields in the block until 2033 and 2036, though the company hopes to have that time extended for the time lost due to sanctions.

Since 2017, the GPC has operated the oil fields without Gulfsands’ involvement. The company reported that about 27 million barrels of oil have been extracted from the field between 2017 and the end of 2020, describing this production as “stolen.” It is unclear which groups are extracting said oil, but the area is controlled by the AANES.

Though the company is compliant with western sanctions, its “strategy continues to be to protect and preserve its rights in respect of … Block 26 asset in Syria … and to prepare for a return when circumstances allow.” Gulfsands added that it is working with the international community “to facilitate such a return.”

In March 2021, Michael Kroupeev, a Russian businessman said to be close to the Kremlin, bought out Syrian billionaire Ayman Asfari’s shares in the company. Through his investment company, Waterford Finance, Kroupeev now owns over 50 percent of the company’s shares and acts as its non-executive director.

With Waterford Finance’s control of Gulfsands, Russia has an almost exclusive monopoly on the oil and gas sector in Syria. At least three Russian companies have been granted contracts to explore for oil and gas off of Syria’s coast.

Prior to Syria’s civil war, the country produced about 380,000 barrels of oil per day.