London — International oil companies are maintaining normal production in Iraq so far but have evacuated some staff and stepped up security following the death of a key Iranian general, oil field sources told S&P Global Platts Friday.
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The oil ministry also said the "situation is normal across all oil fields in Iraq and exports and production operations are unaffected," but added that employees with US citizenship and who work with oil companies in south Iraq left "at the request of their government."
The oil field sources said that the withdrawal of the few staff concerned wouldn't affect operations, which were continuing normally, but that there was a great deal of apprehension, with all the IOCs and their foreign contractors monitoring the security situation closely.
ExxonMobil, which operates the West Qurna 1 field, is evacuating the remaining 17 daily rate expats still there, leaving the fields with Iraqi staff only, the sources said. The bulk of their US staff continue to work from the UAE since their previous evacuation in June.
Tensions between Iraq and ExxonMobil flared up last year when the company decided to move some of its staff from Iraq temporarily due to heightened security concerns. Iraq denied there was any material change in the security situation, and the government said at the time that it was not happy with ExxonMobil's decision. ExxonMobil was not immediately available for comment.
The sources added that other companies, such as BP, were evacuating the few US staff remaining. BP was not immediately available for comment.
Analysts said the situation bears close watching as oil fields and ports could be vulnerable to escalating tensions in the region.
"At a minimum American citizens and institutions in the region are at imminent risk. US energy companies operating in Iraq could certainly be targeted in reprisal attacks," global head of commodity strategy at RBC Capital Markets Helima Croft said.
Crude futures rallied by more than 4% Friday as the assassination of top Iranian commander Qassim Soleimani raised geopolitical tensions and the threat of further attacks by Iran on Middle East infrastructure. Soleimani was killed by the US military in response to his role in attacks on US diplomats and service members in Iraq and throughout the region, including his approval of the attack on the US Embassy in Baghdad this week.
Iraq, OPEC's second-largest producer, has endured recent violent demonstrations between citizens and the government since October, particularly in the oil-rich southern province of Basra. Demonstrators have demanded more economic development and jobs. The southern oil field of Nasiriyah that was shut down for a day on December 29 by protesters without disrupting production, according to the ministry.
Iraq pumped an average of 4.73 million b/d of crude from January to November last year, according to Platts OPEC Survey. This is more than 200,000 b/d above its 4.51 million b/d quota under the previous agreement by a coalition of OPEC and other oil producers, or OPEC+.
Under the new agreement that runs through March 2020, Iraq will have to cut a further 50,000 b/d to comply with the new OPEC+ pact.
--Edited by Jonathan Dart, firstname.lastname@example.org