A Review of the Nigerian Energy Industry

Militant surge threatens Iraqi fields

Iraqi oil production19 June 2014, News Wires – International oil companies moved to reduce expatriate staff in Iraq amid fears that fighting raging between Sunni militants and the Shia-led Iraqi government could soon spread to the main oil producing hub of the southern Basra region.

The move came as the rebels launched a major attack to seize control of Iraq’s largest oil refinery in Baiji in the Sunni heartland of northern Iraq where rebels have taken over several cities in the past week.

Iraqi officials said the Islamist fighters were shelling the refinery after taking over several of the key sites at the 300,000 barrel-per-day facility.

Iraqi army spokesman General Qassem Atta said the rebels had been dislodged by the army. Many of the refinery workers had earlier been airlifted out of the area.

The refinery has been under siege since the fighters launched a major military offensive last week.

Officials said the Basra region – accounting for almost all of Iraq’s current output of 3.2 million bpd – remains out of the reach of the Islamic State of Iraq and Syria (Isis) that is aiming to enter Baghdad.

Baghdad assured IOCs the oil producing regions in the Shia south were safe as they are being protected by 100,000 well-trained policemen and security guards.

Western and Asian companies are, however, taking no chances, moving quickly to reduce non-essential expatriate staff as a precaution against possible attacks.

“We are just very vigilant in Iraq. Non-essential production people have left, but operations continue,” BP’s chief executive Bob Dudley told reporters in Moscow.

US supermajor ExxonMobil , which like BP, is developing a supergiant field in Basra, has also reduced staffing levels.

China National Petroleum Company (CNPC) is also evacuating some of its employees after the kidnapping of one of its workers. A CNPC official confirmed the kidnapping but added the employee at the Halfaya oilfield had been released.

China has the largest number of expatriate oilmen in Iraq where Chinese companies play a leading role in a number of oilfield developments.

At the same time, the Chinese Foreign Ministry advised citizens to avoid Iraq. Malaysia’s Petronas also evacuated non-essential employees to nearby Dubai but said its Iraqi operations were unaffected.

Russian companies have yet to take action but are working on contingency plans in case the fighting spreads south.

Despite the dangers posed by the Isis fighters, major companies see no immediate threat to their operations in the Basra region.

“The people we are dealing with appear to be very much in control of the oil communications that we have,” Dudley said..

IOCs will resort to a full evacuation of their foreign staff only if the rebels manage to move closer to Baghdad.



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