x Abu Dhabi, UAE Thursday 20 July 2017

Total halts production in Syria as sanctions tighten

Total has become the latest oil company to halt production in Syria, adding to pressure on the Assad regime as fuel supplies become harder to find.

Total has become the latest oil company to halt production in Syria in response to tightening sanctions against the regime of Bashar Al Assad, the president, and his regime.

Yesterday the French company said it was halting work at the Deir Al Zor and Tabiyeh oil and gasfields to comply with the restrictions.

"We have informed the Syrian authorities of our decision to stop operations with General Petroleum Corporation to conform to the sanctions," Total said.

"Our main concern remains the security of our employees."

The US, EU and the Arab League have imposed economic sanctions and imposed travel bans on Syrian officials to pressure the government to end its violent, eight-month crackdown on protesters. More than 3,500 people have died during the unrest, according to the UN.

A third of Syria's export income is from sales of its crude. It relies on imports for much of its fuel for transport and electricity production, the bill in the first three months of this year coming to about US$1 billion (Dh3.67bn), the equivalent of 6 per cent of the country's GDP.

Total's production largely fed the domestic market. Its exit and that last week of Royal Dutch Shell, the only other "supermajor" in Syria, has implications for oil revenues and domestic fuel needs alike. Syria Trading Oil, which handles much of the country's shipments in both directions, was named on the EU's blacklist on Friday.

"There's a potential for this to spill over into problems of transportation as well as problems of electricity provision," said Catherine Hunter, a Levant analyst at IHS Global Insight in London.

"They're looking at perhaps the regime's support base within the country, to make the measures undermine the regime at home."

Last year Syria pumped about 370,000 barrels per day, with about a third exported to countries including Italy and the Netherlands.

Total renewed its 50 per cent stake in the Deir Al Zor licence in 2008, extending rights to pump oil through 2021. Last year Deir Al Zor and Tabiyeh produced 39,000 barrels of oil equivalent per day, up from 20,000 barrels a year earlier.

ayee@thenational.ae

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