British Company Concerned over its Oil ‘Rights’ in Northeastern Syria

British company Gulfsands Petroleum has distanced itself from the partnership agreement between the United States’ Delta Crescent Energy company and the Kurdish autonomous administration east of the Euphrates River in northeastern Syria.

Officials from the firm told Asharq Al-Awsat that they will “defend the company’s rights” to invest in oil in Block 26, which is located east of the Euphrates and believed to produce 20,000 barrels of oil per day.

Gulfsands had signed a deal with the Syrian government in 2003 to invest and develop Block 26. According to the agreement, two-thirds of production will go to the government after calculating costs. Since 2011, the block came under the control of the Kurdish People’s Protection Units (YPG) and later the Syrian Democratic Forces (SDF) due to the ongoing Syrian conflict and the American and European sanctions against the Damascus regime.

Officials from Gulfsands told Asharq Al-Awsat that more than 26 million barrels of oil have been produced from Block 26 in four years. The production was unlicensed and it is unknown who received the oil or the extent of the damage that has been inflicted on the field.

Gulfsands has invested more than 350 million dollars in Block 26, which experts estimate is worth billions of dollars.

American investment
Prior to the eruption of the conflict in 2011, Syria used to produce some 360,000 barrels of oil per day. Production has since dropped to around 60,000. Some 90 percent of its oilfields and half of its gas fields are controlled by the SDF, which is backed by the US-led anti-ISIS coalition.

In Aril, Delta Crescent Energy struck a deal with the autonomous administration to obtained a license from the US Treasury to operate in northeastern Syria seeing as the war-torn country’s oil sector is under American and European sanctions.

Delta Crescent Energy was established in the US state of Delaware in February 2019. Its partners include former US ambassador to Denmark James Cain, James Reese, a former officer in the Army’s elite Delta Force, and John Dorrier Jr., a former executive at GulfSands Petroleum, reported Politico in August.

In July, Republican Senator Lindsey Graham, who is close to President Donald Trump, declared before Congress that SDF chief Mazloum Abdi had informed him of the signing of an oil investment agreement with an American company. US Secretary of State Mike Pompeo said the administration supports the deal and said it is intended to “modernize” the oilfields. “The deal took a little longer ... than we had hoped, and now we’re in implementation,” he said.

The deal was, however, widely criticized by Damascus, Moscow, Tehran and Ankara. They slammed it as “political recognition of the Kurdish administration” and violation of the Astana agreement reached between Russia, Iran and Turkey. Washington defended the deal, saying: “Syrian oil is for the Syrian people and we remain committed to the unity and territorial integrity of Syria. The United States government does not own, control, or manage the oil resources in Syria. The populations in areas liberated from ISIS make their own decisions on local governance.”

Protecting oil
“The goal is to get the production back up to where it was before the civil war and sanctions,” said Ambassador Cain according to Politico.

“I think this company’s going to improve the viability of the northern oil fields to make them more productive,” Graham said. “Conceptually it makes sense that we should, instead of just writing checks, help people help themselves.”

In October 2019, Graham played a role in persuading Trump to keep American forces deployed east of the Euphrates River after he had announced that he wanted to pull back the troop to the border with Turkey. Trump later confirmed that a small number of forces will remain in oil-rich areas, stressing that the US has “secured and protected” the oil. Indeed, some 500 soldiers remain east of the Euphrates and they have been supplied with better military gear to protect the oilfields.

Many questions have been asked about the role the American military and administration are playing in the new oil deal. Pentagon spokesperson Jessica McNulty noted that the Department of Defense “does not have an affiliation with any private companies in regard to the oilfields in northeast Syria.” However, she added that US forces in the region are “securing critical petroleum infrastructure in northeast Syria to deny ISIS access to critical resources and revenue,” reported Politico. McNulty also noted that the oil resources "currently provide some of the funding necessary for the SDF to conduct operations" against ISIS.

Sovereign rights
The deal between the American company and autonomous administration calls for the establishment of at least two makeshift oil refineries in the region east of the Euphrates that can produce 20,000 barrels of oil per day. The production will meet some of the local demand.

Other sources, however, weighed the possibility that the deal could allow operators to expand their work and invest in other oilfields. This would raise concerns among other oil companies, including Gulfsands.

Officials at the firm said they were “surprised” with the deal that was struck between Delta Crescent Energy and the Kurdish administration. One official said Gulfsands continues to investigate the details of the agreement and was determined to “protect” its rights. Moreover, he said that the firm was not involved in politics, but hopes that peace and stability will be restored in Syria.

Gulfsands remains committed to its project in Syria and is determined to protect its rights in line with international laws, he added. The company has signed a binding agreement with a sovereign state and it expects that its rights be recognized, hoping that it will resume its work when conditions permit it.

On the other end of the divide, Kurdish officials defended their deal with Washington, saying it had political undertones seeing as it was signed directly between an American company and the autonomous administration without having to obtain the Syrian government’s approval.

“The political significance of the deal is important and is tantamount of recognition” of the autonomous authority, he explained. Furthermore, it eases concerns that the US may suddenly pull out its troops from the region east of the Euphrates.

Residents of Nur Shams camp in the occupied West Bank are fearful for their future after an Israeli raid this week damaged the UN agency for Palestinian refugees office there.

The 13,000 inhabitants of the camp near the northern city of Tulkarem depend heavily on the United Nations Relief and Works Agency for Palestine Refugees.

UNRWA notably runs two schools, a clinic and sanitation services in Nur Shams.

Stunned refugees watched as workers cleared rubble from around the office, which was almost totally destroyed in an "anti-terrorist" operation on Thursday.

"For us, it's UNRWA or nothing," Shafiq Ahmad Jad, who runs a phone shop in the camp, told AFP.

"For the refugees... they look to UNRWA as their mother," said Hanadi Jabr Abu Taqa, an agency official in charge of the northern West Bank.

"So imagine if they lost their mother."

UNRWA chief Philippe Lazzarini blamed the destruction on Israeli forces, saying they had "severely damaged" the office.

But the military firmly denied the accusations, telling AFP that the damage was "likely" caused by explosives planted by "terrorists".

The office will have to be relocated, "a significant investment" according to Roland Friedrich, the agency's head in the West Bank.

"The psychological impact, of course, is devastating," he added after speaking to residents on Saturday.

- 'Attack on right of return' -

From his phone shop whose facade was torn off, Jad watched as excavators removed rubble and technicians repaired communications cabling.

He said he believed the chaos was linked to the Israeli parliament's adoption late last month of a law banning "UNRWA's activities on Israeli territory".

Were the agency to disappear even from the Palestinian territories like Tulkarem, he said the streets would fill with even more rubbish and sick people would go without care.

"To want to eliminate it is to want to eliminate the Palestinian question," Jad said.

Fellow camp resident Mohammed Said Amar, in his 70s, said Israel was attacking UNRWA "for political ends, to abolish the right of return".

He was referring to the principle that Palestinians who fled the land or were expelled when Israel was created in 1948 have the right to return, as do their descendants.

He insisted that Palestinian armed groups did not use the UNRWA premises, which locals consider "sacred".

If the army destroyed the building, as he believed, this meant it always wanted to target it.

Nihaya al-Jundi fumed that daily life was paralysed after every raid and that impassable roads left residents isolated.

Nur Shams needs international organizations like UNRWA to rebuild, said Jundi, whose center for the disabled was damaged and where the wheelchair ramp collapsed.

The camp, established in the early 1950s, was long a fairly quiet, tight-knit community.

But in recent years, armed movements have taken root there against a backdrop of violence between Palestinians and Israelis, economic insecurity and no political horizons.

- 'They worry' -

Two days after the Israeli operation, the internet was still not repaired and some main roads remained an obstacle course.

UNRWA's operations have resumed, however.

"The first thing we do is that we make sure that we announce that the schools are open," said the agency's Jabr Abu Taqa.

"We know how important it is for us to bring the children to what they consider a safe haven," she added.

As she strolled through the camp, many anxious residents approached her.

One young man pointed to a ransacked barber's shop and asked: "What did he do to deserve this, the barber? He no longer has work, money. What will he do?"

Mustafa Shibah, 70, worried about his grandchildren. He turned his radio's volume all the way up during the raids -- but the little ones were not fooled.

"My granddaughter wakes up (from the raids) and bursts into tears," he said.

"They worry, they have trouble getting to school because of the (damaged) road."

For him, the threats to UNRWA are just the latest example of the suffering of Nur Shams residents who feel abandoned by Palestinians elsewhere.

"Why is it only us that have to pay while they dance in Ramallah and have a good life in Hebron?" he asked.

He said Israel "feels they can do anything" with no one to stop them.

British Company Concerned over its Oil ‘Rights’ in Northeastern Syria