Iraqi turmoil has foreign companies on edge

The U.S. government, which has urged Americans not to travel to Iraq, is also warning civilians working in the country to be prepared to evacuate on short notice as an Islamist insurgency pushes the country to the brink of civil war.

Lockheed Martin ( LMT), the world's largest defense contractor, has evacuated its employees from Iraq, and "will continue to monitor the situation before determining when they can return," says Gordon Johndroe, vice president for Worldwide Media Relations, in a statement.

However, BP (BP), Europe's second-largest energy company, and Baker Hughes (BH), the third-biggest oil-field services provider, continue to operate normally in Iraq, at least for now. "Our operations are in the south of Iraq in the Rumaila field, though we don't have large numbers of staff," said Robert Wine, a BP spokesman. "Of course, we are monitoring the situation, the safety of our staff is paramount, but so far there is no impact on operations at Rumaila."

Added Baker Hughes spokeswoman Melanie Kania: "We are aware of the situation, and we are monitoring it very closely. The safety and of our employees is our number one priority at this time." She declined to elaborate further.

Others companies aren't so lucky. According to news reports, several contractors trying to flee Balad, Iraq, have gotten attention on social media sites such as Twitter (TWTR). Though some of the workers have been evacuated, it isn't clear if some were left behind.

According to The New York Times, the U.S. government and its long-time foe Iran may join forces to quell the insurgency lead by the Islamic State in Iraq and Syria (ISIS), whose rapid advance through Iraq caught many in the world community by surprise. Secretary of State John Kerry calls it an "existential crisis" for Iraq's existence.

Even under the best of circumstances, working in Iraq is dangerous. A U.S. government website urges people who travel there to hire security, which can cost $4,000 to $7,000 per day. More than 6,700 contactors have been killed in Iraq and Afghanistan since the start of the conflicts.

Ever since Saddam Hussein's fall in 2004, private companies have been eager to establish a foothold in Iraq, whose infrastructure, including its oil business, had been decimated by wars and neglect. The U.S. Congress allocated more than $60 billion to rebuild Iraq. Unfortunately, as the Office of the Special Inspector General noted last year, about 15 percent of those funds, some $8 billion, was wasted. That estimate may be conservative.

"We found that incomplete and unstandardized databases left us unable to identify the specific use of billions of dollars spent on projects, because the U.S. government agencies involved were not required to manage project data in a uniform and comprehensive manner," the report says.

Still, foreign companies aren't going to give up on Iraq easily because the country's needs are great and the potential for profits are huge. The U.S. government estimates that Iraq's national revenues would quadruple over the next decade as its oil industry gets back on its feet -- at least that was the theory.