Occidental in Syrian Gas Project

Occidental Petroleum Corp. will join Canadian and British partners in a multimillion-dollar Syrian natural gas project, despite the U.S. government’s expected sanctions on future investments by energy companies in the country, the company said Thursday.

Los Angeles-based Occidental is part of a group led by Petro-Canada that was selected by the Syrian government to negotiate a production-sharing contract to develop gas reserves in the Palmyra area gas project, the companies said.

Talks will start immediately, said Petro-Canada, which will operate the development. The other partner is Petrofac Ltd. of Britain.

It is not known how long the discussions will last, Petro-Canada spokeswoman Michelle Harries said.

Occidental has a 25% stake in the project, which will sell gas into Syria’s power-generating markets and could start in 2007.

The Bush administration is expected to curb future investments by U.S. energy companies in Syria under a wave of new sanctions over alleged support by the country for groups on the U.S. list of terrorist organizations, according to congressional sources. Existing projects would be allowed to proceed.

Occidental was not immediately available to comment on the implication of possible sanctions on the project.

For its part, Petro-Canada would not be directly affected by U.S. sanctions, Harries said.

“It could affect Occidental because it is a U.S. company, in which case, because we are the operator, we would be willing to take on any additional equity,” she said.

The project would involve developing as many as 15 gas discoveries at fields located in two clusters -- one east of the city of Homs and the other southeast of Alleppo, Petro-Canada said. The development would include two gas treatment and separation plants.