Gulfsands ends payments to Assad’s cousin – but continues supporting Syrian regime with $8 million every week

24 Aug 2011 admin

Documents revealed by the FT amid concerns raised by Avaaz show that

Gulfsands Petroleum, the London-listed oil and gas company, agreed to give a share of profits from its production activities in Syria to a company controlled by Rami Makhlouf, the first cousin of Syrian president Bashar al-Assad.

The company has also paid more than $1m in fees to Ramak, the Makhlouf family’s holding company, for services connected with its operations in the country.

Facing increasing public attention over its close relationships with the Syrian regime, Gulfsands today released details of its payments and engagement with Rami Makhlouf. This includes the 5.7% Al-Mashrek shareholding in Gulfsands, rental fees for an office in Damascus, and payments under the Ramak Services Agreement.

Ramak was apparently hired to “provide advice and to assist in identifying, evaluating and pursuing E & P opportunities in Syria, including in connection with the successful public tender for Block 26”. This is interesting, as Ramak is a holding company known best for its duty free stores, not for its expertise in the oil industry. However, the company is known for winning public tenders in Syria. Ramak was added to the Treasury Department’s Blocked Persons List precisely because of Makhlouf’s use of “access to high-level Syrian Government insiders to enrich himself at the expense of the Syrian people”.

Gulfsands claims now to have suspended all payments to the Makhlouf interests after EU sanctions imposed in May 2011. This is possible, but begs the question of why the company claimed in July 2011 that “business as usual” continued in Syria, with no reference to a severance of relations with a key partner. Today’s public statement came only in the context of increased questions in the media, undermining Gulfsands’ claims to be acting responsibly.

Today’s news release also gives the impression that Gulfsands has been complying with both EU and US sanctions:

“Gulfsands notes that the US and EU have imposed a number of sanctions against Syria and various named individuals and organisations. Gulfsands is fully compliant with all applicable sanctions”

This is a clever dodge – note the use of the word “applicable”. US sanctions are not applicable to Gulfsands – because it moved its headquarters from Houston to London. This enabled the company to continue payments to Ramak until now.

Under pressure, Gulfsands has distanced itself a little from Rami Makhlouf. But the company is pressing ahead with its record extraction levels. PLATFORM’s calculations show that Gulfsands is paying the Syrian regime between $4.5 million and $8.4 million in revenue and oil – every week. This provides Assad’s dictatorship a key capital lifeline to continue its attacks on the uprising.

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