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The escalating violence in Iraq has spread to resource-rich Kurdistan, casting a shadow over London-listed oil explorers including Afren and Genel Energy.

Oil firms have shut down operations and withdrawn staff, amid fears terror group ISIS will bring its deadly brand of Islamic extremism to the semi-autonomous region of northern Iraq.

Kurdistan oil explorers have remained relatively sanguine about events in Iraq, with industry insiders saying in private that the usually peaceful region is isolated from the terror threat.

Hit: Afren is badly affected by the crisis

The crisis has even raised the prospect that Kurdistan will seize the opportunity to secede from Iraq, which could ultimately prove beneficial for oil companies there.

But recent advances by ISIS have seen the violence spill over into Kurdistan, forcing local oil firms to admit the risks they face.

Afren, which last month suspended its chief executive and chief operating officer over allegations they received ‘unauthorised payments’, is the worst affected at present.

It said the deteriorating security situation has forced it to shut down one of its oil fields, called Barda Rash. A spokesman said: ‘Afren is implementing a phased withdrawal of non-essential field personnel from the Barda Rash field.’

The company said its other operations in Kurdistan were unaffected and that it did not expect cashflow to suffer. But its shares fell 0.9p further to 98.6p.

Genel Energy, the largest oil explorer in Kurdistan, said it had taken the ‘prudent and precautionary’ step of evacuating non-essential staff, but has not halted production. ‘We remain confident in the Kurdistan Regional Government’s ability to maintain the territorial integrity of both the Kurdistan Region of Iraq and oil infrastructure,’ said the firm, led by former BP boss Tony Hayward. Genel’s stock fell 19p to 798p, or more than 2 per cent.

Earlier this week, oil explorer Gulf Keystone Petroleum (down 0.75p to 67.5p) said its operations remained ‘safe and secure’.

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