Gulfsands Petroleum announced it acquired an "extensive portfolio" of oil and natural gas concessions in northern Morocco. The company trades on the London stock exchange and boasts of its work in the United States, Tunisia and Syria. In February, the company said conflict in Syria was complicating its operations there. The company said recently, however, that it had assessed numerous opportunities in the Middle East before settling on Morocco. With the civil war in Syria descending on the capital Damascus, the migration of Gulfsands Petroleum may be a bellwether of the overall conflict.
Gulfsands said it was spending at least $19 million to buy close to 3.3 million acres of what it said was "highly prospective oil and gas" land in northern Morocco. One of the Moroccan assets in the Rharb Basin could bring 7 million cubic feet per day in production for Gulfsands by 2014 and continue at that rate for the next five years.
"With this acquisition and the recently announced move to assume operatorship and increase our interests in Tunisia, we are making great progress towards achieving our ambition of providing the company with the opportunity of creating substantial shareholder value through operations and exploration success in additional countries of the MENA region," said Richard Malcolm, the company's CEO, in a statement.
Apart from Tunisia and Morocco, the company has a memorandum of understanding with the Iraqi government to capture gas flared from its giant oil fields. But less than a year ago, Oilprice.com had asked why the company was still drilling for oil in Syria, which by then was roughly one year into civil war. Before pulling out of the country, the company was describing oil reserves there with an estimated 19.2 million barrels of oil equivalent. Malcolm said it was a "disappointing" decision to leave Syria where there remained "substantial exploration potential still untapped."
In early February, the United Nations had put the death toll in Syria at around 5,000 people. By late November, that figure passed the 40,000 mark. Until recently, the Syrian capital seemed relatively secure, but no more. Now, even Russian President Vladimir Putin is wondering what's next in Syria, saying the Kremlin's "position is not to keep (Syrian President Bashar) Assad and his regime in power at any cost."
A report released from an independent commission of inquiry on Syria said the country has witnessed "destruction on a massive scale" since the war began in early 2011. Apart from accounts of snipers, rampant torture and summary executions, the commission's report suggests the Assad regime is losing control. Anti-government groups control "large swathes" of northern and central Syria and "are equipped with increasingly efficient military assets allowing them to mount a serious challenge to the government forces’ authority."
Gulfsands early this year reported a 43-percent decline in production in large part because it left Syria. It's most recent acquisition in Morocco was described, however, as "very positive." The company entered 2012 amid criticism for work in a country on the cusp of full-fledged civil war. It ends the year by looking at a post-Syria future. With civil war weakening the government's control over the country, Gulfsands move elsewhere in the Middle East may be an indication of the coming post-Assad future as well.
By. Daniel J. Graeber of Oilprice.com
