Gulfsands Petroleum claims to be owed $25m

published 2 February 2012

Gulfsands Petroleum, the oil and gas company with significant interests in Syria, has said it is owed around $25m, half of the sum the firm claims is owed to Sinochem, the contractor and working interest partner of Block 26 in Syria.

Last year Gulfsands declared force majeure on Block 26 production operations in response to the tightening of EU sanctions against Syria.

According to Gulfsands, Sinochem has received no payment related to production from the block occurring after December 11th. Production has been at a rate of around 4,000 barrels of oil per day.

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The company has now ceased exploration activity within the block for the duration of the sanctions, which the firm believes to be appropriate both financially and operationally.

"It is disappointing to be obliged to cease exploration following a recent run of considerable success and with substantial exploration potential still untapped," the firm said.

"We remain hopeful that, when the present difficult situation is resolved, such capability combined with the previous track record of proven exploration success will be persuasive with the Syrian authorities in extending the exploration period to account for the period lost due to the sanctions."

The company, which currently has cash balances in excess of $120m and no debts, also announced that its Chief Financial Officer Andrew Rose will be leaving the firm on April 30th.

The share price fell 0.72% to 172.5p by 13:55.