Two London-listed oil explorers are withdrawing workers from the Kurdistan region of Iraq amid fears for their safety as clashes continue between Peshmerga forces of the autonomous region and Isis insurgents in the north of the country.
Genel Energy, led by Tony Hayward, former BP chief executive, insisted on Friday that its key production fields of Taq Taq and Tawke remained secure, stating: “We remain confident in the Kurdistan regional government’s ability to maintain the territorial integrity of both the KRI and oil infrastructure.”
However, the FTSE 250 company said it was withdrawing staff from fields that had not yet begun production in the area.
“In line with moves by other operators, we are taking the prudent and precautionary step of withdrawing non-essential personnel from our non-producing assets in the region,” it said.
Genel’s statement came just as fellow Kurdistan explorer Afren confirmed it had suspended operations at its Barda Rash field.
“Working with our local security advisers, Afren is implementing a phased withdrawal of non-essential field personnel from the Barda Rash field, the company said on Friday. “It is expected that we will return to field operations as soon as it is prudent to do so.”
The moves by Afren and Genel came as President Barack Obama authorised US air strikes to halt the Isis advance and prevent a possible “genocide” of Iraq’s religious minorities, marking a significant escalation of America’s military role in the country.
Until recently Kurdistan was seen as a haven of stability, despite the unrest in the north of Iraq and had seemed immune to the threat of incursions by Isis forces. However, clashes between the Islamic militants and Kurdish Peshmerga forces in recent days have underscored the region’s vulnerability to Iraq’s widening civil war.
Both Genel and Afren insisted there was no immediate threat to cash flow. Earlier this week Mr Hayward predicted a surge in piped exports from the region in spite of the continued civil war on its borders, insisting: “The Isis insurgency is not good for Iraq or the world – but Kurdistan does remain safe and secure.”
Genel’s shares, which have fallen in recent days amid fears over the threat to its operations by the Isis insurgency, held steady at 814p in early trading on Friday. Afren shares dipped 3 per cent 96.4p.
ExxonMobil and Chevron, the two US oil majors who have defied Iraq’s federal government in Baghdad by striking unilateral deals with the Kurdish region to prospect for oil, are also reported to be withdrawing staff from the area.
Chevron said the company was “closely monitoring the situation”. “We have reviewed the business critical expatriate positions and as a consequence made a reduction in the total numbers of expatriates in the region,” it said.
The blow to Afren’s immediate ambitions in Kurdistan comes a week after the company, whose main production assets are in Nigeria, suspended its chief executive pending an investigation into “unauthorised payments”. The move prompted a sharp fall in its share price.
The KRG shipped its first independent oil exports via the Turkish port of Ceyhan to international markets in May, but has since been caught up in bitter wrangling with Iraq’s central government over the right to produce and market its natural resources.
The central government, which sees itself as the sole authority on Iraqi oil, has made attempts to block the sales. Isis militants advancing closer to the semi-autonomous Kurdish region’s oilfields, have only added to investor fears that the exporting ambitions of Genel and its rivals could be stymied.