Oil Diplomacy Editor
US President Barack Obama Aug. 18 signed an Executive Order imposing additional sanctions against Syria’s government, freezing any of its assets in the US, and banning the import into the US of petroleum or petroleum products of Syrian origin.
“This EO…bans US imports of Syrian-origin petroleum or petroleum products; prohibits US persons from having any dealings in or related to Syria’s petroleum or petroleum products; and prohibits US persons from operating or investing in Syria,” Obama said.
In a letter to the US Congress explaining his order, Obama said the situation in Syria constituted “an unusual and extraordinary threat” to the national security, foreign policy, and economy of the US.
The US Department of the Treasury identified additional entities of Syria’s government as falling under the new EO. These included:
• State-owned General Petroleum Corp., which controls Syria’s oil and gas industry and is responsible for the exploration, development, and investment of Syria’s oil and gas exploration activities.
• Syrian Petroleum Co., which oversees Syria’s upstream oil production and development.
• Syrian Co. for Oil Transport, which manages the country’s domestic pipeline system and is responsible for transporting all Syrian crude and petroleum products. SCOT manages Syria’s three major oil export-import terminals—Baniyas, Tartous, and Latakia.
• Syrian Gas Co., which bears responsibility for processing, transporting, and marketing Syria’s gas.
• Syria’s state-oil marketing firm SYRTOL, responsible for selling Syria’s crude to foreign buyers.
US DOT Sec. Tim Geithner said, “The president took decisive action today to add force to his call for Bashar al-Assad to step down by imposing far-reaching sanctions targeting the entire government of Syria and its energy sector. This order strikes at a crucial revenue stream for Syria’s government and, together with our continuing targeted sanctions, will disrupt the Assad regime’s ability to finance its campaign of violence against the Syrian people.”
US bands with others
In 2010, the International Monetary Fund estimated that Syria’s government earns $3 billion/year from oil and gas revenues.
Most of Syria’s oil is used domestically, but it exports 150,000 b/d, 95% of which goes to Europe, primarily to Italy, the Netherlands, France, and Germany.
Obama’s EO coincided with a joint call from UK Prime Minister David Cameron, French President Nicolas Sarkozy, and German Chancellor Angela Merkel for the departure of Al-Assad.
“France, Germany, and the UK reiterate their utter condemnation of this bloody repression of peaceful and courageous demonstrators and the massive violations of human rights which President Assad and his authorities have been committing for months,” the joint statement said.
“We are actively supporting further strong EU sanctions against the regime of President Assad,” the statement said.
The 27-member European Union made the same call, saying it would impose further sanctions on the Al-Assad regime.
A list of options will be presented to a meeting of senior European diplomats on Aug. 19 that will include measures to significantly extend current sanctions beyond named individuals and companies.
In Syria, meanwhile, European oil companies are reportedly continuing multimillion dollar trade with Syria, providing the Al-Assad regime with a key source of funds.
Traders reported that Total SA had sold Repsol YPF SA a 30,000-ton cargo of naphtha, valued at $30 million, which is set to load from Syria’s Banias refinery on Aug. 22. Both companies declined to comment.
Several traders said that Total and Repsol YPF also won a tender for the sale of two, larger crude oil cargoes earlier this week. The companies also declined to comment on these reports.
Earlier this week, Syria’s Oil Minister Sufian Allawi said a promising gas field had been discovered in the central governorate of Homs.
“The first wells were drilled at Qara in Homs governorate and the flow rate is 400,000 cu m/day,” said Allawi.
“This discovery opens new perspectives in the region of Qalamun and the Syrian company will continue its drilling,” said Allawi, who added that the new field lies in the Dau basin.
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of title 3, United States Code,
I, BARACK OBAMA, President of the United States of America, in order to take additional steps with respect to the Government of Syria’s continuing escalation of violence against the people of Syria and with respect to the national emergency declared in Executive Order 13338 of May 11, 2004, as modified in scope and relied upon for additional steps taken in Executive Order 13399 of April 25, 2006, Executive Order 13460 of February 13, 2008, Executive Order 13572 of April 29, 2011, and Executive Order 13573 of May 18, 2011, hereby order:
Section 1. (a) All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person, including any overseas branch, of the Government of Syria are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in.
(b) All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person, including any overseas branch, of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in: any person determined by the Secretary of the Treasury, in consultation with the Secretary of State:
(i) to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, any person whose property and interests in property are blocked pursuant to this order; or
(ii) to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to this order.
Sec. 2. The following are prohibited:
(a) new investment in Syria by a United States person, wherever located;
(b) the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any services to Syria;
(c) the importation into the United States of petroleum or petroleum products of Syrian origin;
(d) any transaction or dealing by a United States person, wherever located, including purchasing, selling, transporting, swapping, brokering, approving, financing, facilitating, or guaranteeing, in or related to petroleum or petroleum products of Syrian origin; and
(e) any approval, financing, facilitation, or guarantee by a United States person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited by this section if performed by a United States person or within the United States.
Sec. 3. I hereby determine that the making of donations of the type of articles specified in section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)) by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to section 1 of this order would seriously impair my ability to deal with the national emergency declared in Executive Order 13338 and expanded in scope in Executive Order 13572, and I hereby prohibit such donations as provided by section 1 of this order.
Sec. 4. The prohibitions in section 1 of this order include but are not limited to:
(a) the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to this order; and
(b) the receipt of any contribution or provision of funds, goods, or services from any such person.
Sec. 5. The prohibitions in sections 1 and 2 of this order apply except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted prior to the effective date of this order.
Sec. 6. (a) Any transaction by a United States person or within the United States that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order is prohibited.
(b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.
Sec. 7. Nothing in sections 1 or 2 of this order shall prohibit transactions for the conduct of the official business of the Federal Government by employees, grantees, or contractors thereof.
Sec. 8. For the purposes of this order:
(a) the term “person” means an individual or entity;
(b) the term “entity” means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization;
(c) the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States; and
(d) the term “Government of Syria” means the Government of the Syrian Arab Republic, its agencies, instrumentalities, and controlled entities.
Sec. 9. For those persons whose property and interests in property are blocked pursuant to this order who might have a constitutional presence in the United States, I find that because of the ability to transfer funds or other assets instantaneously, prior notice to such persons of measures to be taken pursuant to this order would render those measures ineffectual. I therefore determine that for these measures to be effective in addressing the national emergency declared in Executive Order 13338 and expanded in scope in Executive Order 13572, there need be no prior notice of a listing or determination made pursuant to section 1 of this order.
Sec. 10. The Secretary of the Treasury, in consultation with the Secretary of State, is hereby authorized to take such actions, including the promulgation of rules and regulations, and to employ all powers granted to the President by IEEPA as may be necessary to carry out the purposes of this order. The Secretary of the Treasury may redelegate any of these functions to other officers and agencies of the United States Government consistent with applicable law. All agencies of the United States Government are hereby directed to take all appropriate measures within their authority to carry out the provisions of this order.
Sec. 11. This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
Sec. 12. This order is effective at 12:01 a.m. eastern daylight time on August 18, 2011.
Syria’s gas production has reached 30.29 million cu m/day, up by 3 million cu m/day since last year, according to Allawi who also said that Syria’s oil production stands at 380,000 b/d.