GULFSANDS Petroleum, the UK oil explorer with assets in Syria, said it had suspended payments to a cousin of the Syrian president yesterday as it sought to appease criticism about its activities in the conflict-torn country.
The explorer, which first entered Syria in 2000, said it was “fully compliant” with sanctions against the country and insisted it had kept its relations with Assad’s cousin Remi Makhlouf, who owns a 5.7 per cent stake in Gulfsands via his investment company Al Mashrek, at “arms-length”.
In May, the European Union followed the US in imposing sanctions on Syria’s president Bashar al-Assad and members of his inner circle, including Makhlouf, aimed at stopping the Syrian government’s continued crackdown on dissident protesters.
Yesterday Europe and the US circulated a United Nations draft resolution seeking an arms embargo and other sanctions.
For Gulfsands, the sanction could be disastrous, given that its Syrian arm generates 100 per cent of its profits. The company has assets in America but they are loss-making.
In its statement yesterday, Gulfsands revealed its close ties with Makhlouf, who owns Syria’s largest mobile phone company, Syriatel, and several large construction and oil firms.
The explorer paid $1m in fees and milestone payments to Ramak, the Makhlouf family’s holding company, for services connected with its operations in the country.
“All such relationships have been conducted on arms-length commercial terms, have been properly documented and have been disclosed as required by pertinent laws and regulations,” Gulfsands said.
Gulfsands, which listed on London’s junior stock market last year, paid $45m (£27m) in royalties to the Syrian government, representing its cut of revenues from the company’s oil production. Royal Dutch Shell and Total have smaller operations in Syria, which amount to a small fraction of their global businesses.