EU set to adopt new Syrian sanctions: diplomats

(BRUSSELS) - The EU is set to adopt fresh sanctions against Syria that may include a ban on oil investment and on delivering cash notes printed in Europe to its central bank, diplomats told AFP Tuesday.

Experts of the 27 European Union member states meeting in Brussels have reached "political agreement on the ban of new investments in the Syrian oil sector", one of the diplomats said.

The talks were ongoing to widen the package of sanctions "with a view to adoption early next week", the source added.

The ban on new investment would also target Syrian companies active abroad and seek to halt all loans, purchases or joint ventures involving the Syrian oil sector, another said.

It has further been agreed to add five new companies to the list of those whose assets have been frozen in the EU and talks were continuing to add yet more names of companies and individuals, the sources said.

No consensus has been reached on a proposal to halt the delivery of bank notes printed in Europe, "but noone has pronounced themselves against it", they added.

The diplomats said that Austrian, German and Belgium companies print money for the Syrian central bank.

French oil giant Total is one of the biggest foreign companies present in Syria, alongside Anglo-Dutch Shell and China's CNPC.

Total, whose Syrian activities continue despite the conflict there, extracted 14,000 barrels per day of crude oil from Syrian soil in 2010, and the equivalent of 25,000 barrels per day of natural gas -- 1.6 percent of its total production.

The Paris-based International Energy Agency estimates that Syria exported 124,000 barrels of oil per day to industrialised European countries in the first half of this year, and was sceptical that EU sanctions would have much of an effect on production.

"We do not believe that the sanctions currently in place will affect crude oil production volumes from Syria, which the IEA estimates at (332,000 barrels per day) in August," the agency which represents the major oil consuming nations said in its latest monthly oil market report on Tuesday.

The latest penalties would form the seventh round of sanctions against the regime of President Bashar al-Assad, who has cracked down on protesters demanding democracy in almost daily demonstrations for six months, with the United Nations saying 2,600 people have been killed.

Earlier this month, the EU adopted a ban on crude oil imports, designed to hit hard at Damascus as the EU buys 95 percent of Syria's oil exports, providing a third of the regime's hard currency earnings.

In its latest round of sanctions, the EU also expanded a list of around 50 people -- including Assad himself -- targeted by an assets freeze and travel ban, adding four Syrian businessmen accused of bankrolling the regime.