UPDATE 1-MOL says illegal oil output continuing at its Syria field

Mon Sep 10, 2012 6:51am EDT

Related Topics

* Syrian firm continues pumping oil at Hayan field

* No serious damage to MOL's oil infrastructure

* "Hopeful" for return to Syria after violence (Adds quote, details)

By Emma Farge

GENEVA, Sept 10 (Reuters) - Hungarian oil and gas group MOL said on Monday a Syrian firm was continuing oil production at its Hayan field, even after MOL suspended the field's activities in February, adding this was "illegal."

Foreign oil firms in Syria such as MOL as well as majors like Total and Royal Dutch Shell have suspended or severely reduced their Syrian production due to violence and international sanctions targeting the sector.

"After the force majeure announcement HPC (Hayan Petroleum Company) should have stopped oil activities, however HPC continues production which we consider illegal," MOL's director Jozsef Tatai said at an oil conference organised by Global Pacific & Partners on Monday.

Force majeure allows a company to suspend contractual obligations in the face of unexpected and drastic occurrences such as war or natural disasters.

Tatai said he was not aware of the current production level at the field but added it included oil, gas and condensate.

The Syrian government is desperate to keep oil flowing as it needs to swap this on the international spot market with the vital fuels it needs to survive.

Tatai, responsible for business development, said there was no signs of serious damage at the site and was "hopeful" for a return to the country when the security situation stabilises.

"After the force majeure is lifted, it would make sense for us to look for new opportunities in Syria," he said.

He declined to comment on whether MOL expected to work with the government of President Bashar al-Assad on negotiating future contracts. Before the conflict, MOL was also exploring for oil in Syria at its Aphamia blocks.

Syria produced around 350,000 barrels per day (bpd) before the unrest of which about a third was exported, with most flows going to Europe. (Editing by James Jukwey)

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