Chinese Employees Remain at Iraqi Oil Fields despite Violence

Most employees of two Chinese oil giants are staying in Iraq, despite a worrying security situation and a government warning that armed groups are targeting oil experts.

The Iraqi government warned this month that armed groups nationwide are kidnapping oil experts. The Chinese embassy in Baghdad declined to comment on whether it has a contingency plan for some 10,000 citizens and embassy staff in the country.

China National Petroleum Corp. (CNPC) has evacuated some employees from its al-Ahdab oil field, which is 180 kilometers from Baghdad, a source close to CNPC's project in Iraq said.

Most employees at CNPC's other three oil fields – Halfaya, Rumaila and West Qurna – along with those at China National Offshore Oil Corp. (CNOOC)'s only oil field Maysan, are staying, the source said.

Meanwhile, their British and American counterparts are leaving the country. Exxon Mobil has evacuated all of its employees from the West Qurna oil field, in which it and CNPC each hold a 25 percent stake. About half of BP's employees in the Rumaila oil field have left. BP's share of the contract is 37 percent and CNPC has 38 percent.

Iraq's security situation took a turn for the worse on June 10, when a group named Islamic State in Iraq and Syria (ISIS) seized the northern city of Mosul. ISIS fighters then started moving south, taking more cities and threatening to advance on Baghdad. The Council on Foreign Relations, an independent U.S. think tank, says ISIS is a jihadist group bent on establishing a caliphate, or Islamic state based on sharia law.

The three Chinese state oil companies represent the biggest foreign investors in Iraq's oil industry.

If the situation in Baghdad deteriorates and the chaos spreads to southern Iraq, CNPC and CNOOC will be forced to evacuate their employees, said a source who has years of experience with overseas oil exploration and development. The oil fields will then have to be temporarily handed over to the companies' Iraqi partner, South Oil Co., and work on new projects will have to halt.

The U.S. State Department said on June 14 it will evacuate most of the staff at its embassy. The Australian government made a similar statement on June 16.

On June 12, a Chinese employee of CNPC was kidnapped from the Halfaya oil field project in southern Iraq. A CNPC internal email said the employee was released and the kidnappers were from a local tribe and not part of ISIS.

China Petroleum & Chemical Corp. (Sinopec) controls the Kirkuk oil field, which is in the more northern region of Kurdistan. Sinopec does not have any Chinese employees at the oil field, an employee of the company said