Large Iraqi Oilfield Goes Offline As Operator Evacuates Staff

Operator Petronas has evacuated its employees from an oilfield in Iraq in an effort to protect them from the spreading coronavirus, which has forced Iraq to suspend production at the 95,000-bpd oilfield, Iraqi oilfield officials told Reuters on Tuesday.

Malaysia’s Petronas, the operator of the Gharraf oilfield in southern Iraq, has pulled out workers from the site, but it hadn’t consulted with local officials in Gharraf, the oilfield officials told Reuters.  

So the Iraqi oilfield officials were forced to halt production since they were not given the heads-up that Petronas employees would be evacuated, the officials said, adding they were working to resume the production process on Wednesday.

The coronavirus outbreak is already upending the way companies –including oil companies – work, as they try to protect employees in the global pandemic. Large oil companies in the United States have asked their office employees to work from home and instituted health checks for those who cannot work from home. Exxon, BP, Kinder Morgan, and Shell were among the companies that asked their office staff to start working from home as of Monday and introduced health checks for workers at production sites.

For Iraq, OPEC’s second-largest producer after Saudi Arabia, the coronavirus outbreak is not only a health hazard for employees working at oilfield sites, but a serious financial trouble.

Iraq, which relies on oil revenues for 95 percent of its budgetary income, is one of the least diversified economies in the Middle East.

The oil price crash will likely force heavily oil-dependent Iraq to suspend new infrastructure and energy projects. The OPEC producer may also have to resort to international borrowing to make sure it can pay salaries to public servants after oil prices collapsed to half the price Baghdad had planned to budget this year, Iraqi lawmakers and officials told Reuters last week.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• Largest Oil Glut In History Could Force Crude Prices Even Lower
  
• U.S. Shale Collapse Will Lead To Higher Oil Prices
  
• The Most Destructive Oil Price Crash In History?