An Iraqi worker turns a valve at the Shirawa oilfield outside the northern city of Kirkuk January 19, 2004
An Iraqi worker turns a valve at the Shirawa oilfield outside the northern city of Kirkuk January 19, 2004 © Karim Sahib - AFP/File
An Iraqi worker turns a valve at the Shirawa oilfield outside the northern city of Kirkuk January 19, 2004
AFP
Last updated: June 11, 2014

Iraqi oil production unaffected by jihadist push -- for now

Iraq's oil production and crude exports have so far been unaffected by the jihadist sweep into Iraq's second city and a swathe of northern territory, a senior official said Wednesday.

Iraq, which boasts among the highest reserves of oil and gas in the world, produces about 3.5 million barrels of oil per day, with exports in February reaching 2.8 million bpd, the highest such figure in at least a quarter-century.

Most the oil and gas fields however are in the centre and the south, although militants have seized territory in Iraq's oil-producing Kirkuk province.

The Sunni militants spearheaded by fighters from the Islamic State of Iraq and the Levant (ISIL) overran Mosul on Tuesday, dealing the Shiite-led Iraqi government a spectacular blow and sparking a mass exodus of an estimated half a million people.

The senior government official said that so far the fighting had not touched production nor crude exports.

"The oil sector is not affected and will not be affected by what is happening, because most of the facilities are in central and south Iraq," the official told AFP, speaking on condition of anonymity.

The official added however that crude production could be affected if the militants take Baiji, a town some 150 kilometres (110 miles) south of Mosul that militants attempted to seize on Wednesday.

The New York-based Eurasia Group consultancy also estimated that ISIL's offensive would have limited impact on Iraq's oil exports.

"(ISIL) will use cash reserves from Mosul's banks, military equipment from seized military and police bases, and the release of 2,500 fighters from local jails to bolster its military and financial capacity," said Ayham Kamel, its Middle East and north Africa director.

"We do not anticipate a sharp deterioration in the security environment in... more stable (southern) provinces that would materially impact Iraq's oil export volumes," he said.

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