Syria Operations are Unaffected by Unrest

Syria-focused oil company Gulfsands Petroleum said its operations have not been affected by unrest in the Middle Eastern country, as it reported a 58 percent rise in 2010 profit after oil production rose.

"Around our area there have been absolutely no disturbances," Mahdi Sajjad, general manager of the company's Syrian operations, told Reuters in an interview.

"Our production is continuing as normal. We are producing oil and delivering it to the facility where our pipeline goes. Everything is uninterrupted."

Protests first erupted in Syria's southern city of Deraa on Mar. 18 but have since spread to other parts of the country. Gulfsands oil field is in Syria's northeast, while the unrest has been centered in the south.

"It is going to be a lumpy-bumpy ride for a wee while but it is not affecting our operations. We are staffed primarily by Syrians in Syria so I think we are well-insulated as best we can be," chief executive Richard Malcolm said.

Gulfsands shares were down 2.2 percent at 1420 GMT.

"Looking at Gulfsands purely on a business level, it is doing all the right things, operationally and financially, but the sticking point is the politics in the areas it operates," said Arbuthnot analyst Dougie Youngson.

Shares in the company, which also has operations in Tunisia, have slumped 23 percent since Dec. 17 when a fruit vendor set himself on fire in the North African country, sparking protests.

Malcolm said Gulfsands expected to beginning drilling a second exploration well in Tunisia in May. "We just making sure security issues around the drill site are adequate," he said.

Profits Higher
Gulfsands said 2010 profit after tax rose to $44.7 million after oil production from Syria rose 47 percent to 9,165 barrels of oil per day (bopd).

Production was on track to reach 12,000 bopd by the end of 2011 and would ramp up to 16,000-17,000 bopd by the end of 2012, when a new facility was due on stream, Malcolm said.

Syrian reserves rose 17 percent to 53.6 million barrels in the year, said Gulfsands, as it announced plans to add to its acreage in the Middle East and North African region.

Malcolm said the company had applied for further licenses in Syria and will also seek licenses off the coast of the country.

"We are really focused on organic growth, exploration opportunities, and farm-ins but it does not mean that we would not look at acquisitions."