Iraqi Kurdistan oil sector hit by escalating violence

10 August 2014

ExxonMobil, Chevron, Taqa and Oryx reducing upstream operations

Several oil companies have suspended or reduced operations in Iraqi Kurdistan as clashes escalate between Islamist militants and the Kurdistan Regional Government (KRG) forces.

US-based oil majors ExxonMobil and Chevron were reported on 7 August  to be evacuating staff members from Iraqi Kurdistan, while Abu Dhabi National Energy Company (Taqa) and  Canada’s Oryx have suspended some operations in the area.

“Until now, the enemy has not been able to target oil operations in the region, but as a precautionary measure some of the exploration activities in areas abutting potential combat zones have been temporarily halted and staff relocated,” the KRG’s natural resources ministry said in a statement.

The US military began air strikes against Islamic State of Iraq and the Levant (Isis) militants on 7 August to defend civilians in northern Iraq as the militants overran towns inhabited by Christian and Yazidi minority groups in the northwestern Nineveh province.

Chevron, which is exploring in several blocks in Iraqi Kurdistan said in a press statement that it is “closely monitoring the situation”.

“We have reviewed the business critical positions and as a consequence made a reduction in the total numbers of expatriates in the region,” the US-based company said.

Taqa, which is developing the Atrush field in Dohuk province, suspended its operations and “significantly reduced staff levels” as a precautionary measure. The company added that is still expects to start production as planned in 2015.

Canada’s Oryx has reduced operations at its Hawler licence area in response to increasing instability in Iraq Kurdistan. In the western area of the licence, drilling operations at the Ain al-Safra and Banan sites have been temporarily suspended with non-essential personnel relocated to Erbil.

“In the central portion of the Hawler license area, drilling operations and facilities construction at the Demir Dagh field remain secure and operational but continue at reduced levels primarily due to the departure of certain third-party service company personnel from the site,” Oryx said in a statement. “Production from the Demir Dagh field has also been shut-in.”

While exploration and development will be reduced on several fields, the KRG said on 9 August that oil production remains unaffected and the Erbil government would continue oil exports via Ceyhan, Turkey.

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