By NAYLA RAZZOUK, BRADLEY OLSON and KADHIM AJRASH
ExxonMobil and BP began removing employees from Iraq,
OPECs second-largest oil producer, after Islamist
militants seized cities north of Baghdad and attempted to
capture a refinery.
Exxon evacuated some workers from the West Qurna oil field,
according to a person familiar with the companys Iraq
operations. BP removed non-essential workers, CEO Bob Dudley
Malaysias Petroliam Nasional Bhd. moved 28 of its 166
Iraq employees to Dubai, the company said by e-mail. Royal
Dutch Shell isnt evacuating staff yet and is ready to
do so, Andy Brown, head of Shell Upstream International, said
in an interview in Moscow.
The companies all said theyre continuing to pump oil
and there are few signs Iraqs production has been
curbed after Islamic State in Iraq and the Levant fighters
took northern cities including Mosul. Police near the Baiji
, the nations
largest, said government forces are now in control after a
battle with ISIL.
Crude shipments from the south, where most production is
located, may accelerate next month and Kurds are defending
the Kirkuk oilfield in the north.
The only infrastructure that is currently producing and
supplying international markets is in the south and will
remain untouched, said Kyle Stelma, managing director
of Dubai-based Dunia Frontier Consultants, which researches
Iraq for clients.
Fighters from ISIL battled government forces for control of
the Baiji refinery in northern Iraq on Wednesday, a day after
clashes in Baquba, 34 miles (55 kilometers) northeast of the
capital. A military spokesman said elite Iraqi forces were
defending the Baiji refinery.
A fuel tank at the refinery caught fire after shelling by
militants yesterday, according to the provincial police
command. The refinery
halted operations on June
15 after oil-product shipments were stopped to nearby areas
and its storage tanks were full, according to Iraqs Oil
Brent crude rose to a new nine-month high. The international
benchmark advanced to as much as $114.80/bbl as of 8:53 a.m.
in London, the highest since Sept. 9. It was last at a
nine-month high on June 13.
Companies including Chevron, Total, Marathon Oil, Crescent
Petroleum and Abu Dhabi National Energy Co., which are
drilling in the Kurdish region, are continuing to operate.
Marathon hasnt evacuated employees, spokeswoman Lee
Warren said. Chevrons operations continue as
normal, spokesman Kurt Glaubitz said. Toronto-based
Oryx Petroleum announced successful testing and a ramp-up in
drilling activity in the Kurdish region.
The success of ISIL, a Sunni Muslim al-Qaeda breakaway group,
threatens to re-ignite a sectarian civil war in the country.
It also risks escalating into a conflict that draws in the US
and Iran in defense of Prime Minister Nouri al-Malikis
Shiite-led government, three years after the withdrawal of US
forces. Iraq is the largest oil producer in the Organization
of Petroleum Exporting Countries, after Saudi Arabia.
BPs Dudley said the violence was terrible
and would have far-reaching, wide-ranging
implications for the region, although it isnt
likely to spread all the way to the countrys southern
Iraqi forces killed a Saudi fighter during ISILs
failed attack on the Baiji refinery
, state-sponsored Iraqiya
television reported. Baiji has about 40% of Iraqs refining
capacity, data compiled
Iraq will have to increase the import of oil products
to make up for the loss of Baijis production,
Robin Mills, the head of consulting at Dubai-based Manaar
Energy Consulting and Project
Management, said in an
interview in Dubai. Baiji mainly supplies the north,
but also Baghdad.