Corporate Social Responsibility is among the core values of the Group and therefore protecting those values is a key business priority.

Gulfsands' Board of Directors have put in place a number of policies and programmes designed to ensure the Group maintains high standards of corporate social responsibility ("CSR"). CSR is among the core values of the Group and therefore protecting those values is a key business priority.

While the Board of Directors has a primary responsibility to the Company's shareholders, we also recognise that we have a responsibility to take respectful account of the interests of the other stakeholders in our activities. We believe this is best achieved through the integration of responsible corporate policies and the adoption of programmes and conduct of activities designed to ensure that our business operates in a sustainable business and social environment which enables operations to thrive, our business development objectives to be met and which ensures that the interests of other "stakeholders" in our business are properly respected.

Working within this framework, Gulfsands has achieved deserved recognition for its business ethics and social responsibility, while at the same time providing a safe, reliable and enjoyable working environment for all our employees and associates.

We believe the rigorous upholding of these values substantially lowers the Group's general risk profile, facilitates efficiencies in our dealings with governments and regulatory authorities, and generally fosters and promotes new business opportunities.

The implementation of community relations programmes and related risk management practices are important parts of our efforts to ensure the preservation and enhancement of our reputation and help to reduce operating risks. Being integrated with the communities of the regions in which we operate also helps those we interact with to better understand who we are and the dynamics of our business and, in return, these communities frequently assist us to identify newly emerging local risks affecting our business which helps us to be ready to respond with appropriate solutions.

Gulfsands is committed to utilising, wherever sensibly possible, the skills of the local communities in which we operate and therefore virtually all of the people who work for our Group, whether in Syria or the US, and whether employees or contractors, are nationals of the respective region.

Gulfsands provides its employees and contractors with access and encouragement to undertake technical training to the highest international standards. This commonly involves our sponsorship and support for international travel to undertake courses and training which not only upgrades the technical and business talent we employ but also has greatly assisted us in attracting and retaining talented employees and contractors.

Gulfsands is also well recognised for its level of commitment to the creation of social programmes designed to support the national, regional and local communities where we operate. These programmes have included the establishment and ongoing operation of various programmes in the education and health care sectors as well as social welfare facilities and local infrastructure that has been identified as likely to directly improve the living, working and employment conditions in these communities. A number of these initiatives are worthy of mention here.

Gulfsands has been an important financial supporter of BASMA, a Syrian NGO established in 2006 to provide paediatric cancer treatment facilities and assistance to sick children. Recently Gulfsands assisted BASMA with finance for the construction and establishment of a dedicated paediatric cancer ward at an important teaching hospital in Damascus, the first such facility of its kind in Syria.

Gulfsands continues to be a financial supporter of AMAL, a Syrian charitable organisation helping to provide education and training to meet the needs of disabled children. Other community support initiatives in Syria have included FIRDOS, a rural development organisation which runs education, training and agriculture improvement projects in rural Syria, and the Syrian Trust for Development, which provides infrastructure and assistance to many organisations operating in the non-governmental organisation sector, to help facilitate the implementation of their support programmes.

In Iraq, Gulfsands has provided critically needed financial assistance for the development of a health clinic in the south of the country and support for Iraqi orphans and widows. Furthermore, our proposals to the government of Iraq in relation to the Maysan project and other business development projects that the Group is pursuing in Iraq all include commitments to directly provide or support various health, education and training initiatives and infrastructure for the communities in the regions where the Group expects eventually to operate.

While the sums of money that the Group has committed to all of these initiatives may be modest, its impact on the wellbeing of the communities affected has nevertheless been substantial and has made an important contribution to the reputation the Group enjoys in Syria for corporate citizenship, responsiveness to issues affecting the communities in which we operate, and respect for the privileged position we enjoy as operators of Block 26.

Gulfsands will continue to strive to achieve high standards of corporate social responsibility. We have already achieved some of our objectives in this area but recognise that there is scope to do more, including the expansion of our early initiatives to achieve a legacy from our presence in Syria and Iraq that includes the sustained long term economic development of the local communities where we operate. We will therefore look to expand, within reason, our efforts to create more local jobs and the building of new or expanded local infrastructure, including local primary education and health care.

Gulfsands' early success in discovering the Khurbet East and Yousefieh oil fields in Block 26 Syria, confirms that we are likely to have an important business presence in Syria for many years to come and we are looking to develop similar long term business opportunities in Iraq. Therefore our shareholders and stakeholders can expect to see Gulfsands' future annual reports include an update of this expanding and increasingly important aspect of our business activities.