Big oil companies, including BP plc (ADR) (NYSE:BP) (LON:BP) and Exxon Mobil Corporation (NYSE:XOM), evacuated their workers in Iraq today as militants continued to move forward Baghdad, the country’s capital. Today ISIL militants are fighting against government forces to gain control of the Baji refinery located in the northern part of the country.

BP

BP and Exxon Mobil continue operations in Iraq

BP plc (ADR) (NYSE:BP) (LON:BP) and Exxon Mobile Corporation (NYSE:XOM) implemented evacuations after the companies and the government assessed the situation and decided that Iraq’s output of nearly 3 million barrels per day should remain unaffected by the escalation of sectarian conflict.

According to Dhiya Jaffar, head of the state-run South Oil Company, BP plc (ADR) (NYSE:BP) (LON:BP) evacuated 20% of its workers. Yesterday, the British energy company’s CEO, Bob Dudley, confirmed that non-essential workers were evacuated due to the escalation of the situation.

He said, “We are just very vigilant in Iraq. Nonessential production people have left, but operations continue.”  The British energy company is a major investor in Iraq through the Rumaila oil field. The company’s spokesperson declined to provide further comment regarding the situation.

Some of Exxon Mobil Corporation (NYSE:XOM)’s workers also left the West Qurna oil field, but its operations continue, according a person familiar with the situation.

Kyle Stelma, managing director at Dunia Frontier Consultants in Dubai, which provides research on Iraq for clients said, “The only infrastructure that is currently producing and supplying international markets is in the south and will remain untouched.”

Regional implications

Commenting on the ongoing violence in Iraq, BP CEO Dudley described the situation as “terrible” and said he believed that it has “far-reaching, wide-ranging implications” to the region. He thinks the conflict will not likely spread to the country’s southern oil fields.

“The implications for oil production at the moment appear limited. We are of course very vigilant,” according to Dudley.

On the other hand, Robin Mills, head of Manaar Energy Consulting Management in Dubai, suggested, “Iraq will have to increase the import of oil products to make up for the loss of Baiji’s production. Baiji mainly supplies the north, but also Baghdad.”

Export level will not be affected

Meanwhile, Jaffar said he assured oil companies that the “current developments in Iraq have not affected and will not affect in any way the operation in the south.” He is anticipating that Iraq’s oil export level this month will be around 2.7 million barrels per day, which is not affected by the insurgency in the northern part of the country.