NEW DELHI: ONGC Videsh, the overseas investment arm of state-run Oil and Natural Gas Corporation, faces the prospect of a near-shutdown of crude production from its field in Syria after the European Union late on Friday night blacklisted that country's oil companies to isolate President Bashar al-Assad's government.
ONGC Videsh is a 33% partner in the Al Furat Petroleum Company, a joint venture that pumps oil from the Al-Furat project and has state-owned General Petroleum Company, which has been blacklisted along with Syria Trading Oil. Agency reports from Brussels quoted Shell as saying the Anglo-Dutch major "will cease activities" in Syria. But ONGC Videsh sources here said that it may be Shell's views and the consortium was seeking legal opinion and examining "all available options".
Along with Shell, ONGC Videsh has China National Petroleum Company and Syrian Petroleum Company as partners. The project has had to reduce production from 82,000 bpd (barrels per day) to 70,500 bpd since September due to problems in finding enough number of ships to carry the crude. The Syrian government had asked all operators in the country to cut production after the initial sanctions since evacuation of crude became difficult as most of the tankers were registered either in Europe or the US.
This is the second time that operations of Indian oil companies are being affected by Western sanctions against various regimes. Earlier, Indian refiners could not make payments for crude after the RBI scrapped a regional clearing mechanism to avoid US sanctions on Teheran affecting other transactions. The payments remained stuck for almost a year since the sanctions also blocked transaction gateways through European banks. Dues were recently cleared through a Turkish bank.
US sanctions have also forced India to pussyfoot discussions on the proposal to lay a $10-billion pipeline to wheel gas from Iran through Pakistan as Indian companies investing such massive amounts would automatically be blacklisted. Friday's sanctions listings of Syrian oil companies are part of a concerted push by Europe, the US and the Arab League to intensify pressure on Assad in response to continued state-sponsored violence against protesters. The United Nations estimates 4,000 people have been killed since March in the unrest.
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