* Shi'ite militia threat rises against Western targets
* Exxon moves staff to Dubai until tension eases - Iraqisecurity source
* Other major Western oil companies stay put, but limitexposure
* Oilfield operations continue as normal
By Isabel Coles and Peg Mackey
ARBIL, Iraq/LONDON, Sept 11 (Reuters) - Sheltering in abomb-proof safe room in a heavily-fortified office in Baghdad isthe new reality for a senior Western oil executive who runs oneof Iraq's oilfield mega-projects.
Intensifying violence and car bombs have already forced himto restrict his movements and now, security experts say, he isunder even closer watch from Shi'ite militias that may hit outat Western targets if Washington attacks neighbouring Syria.
"Every time there's a car bomb, we go into lock down mode,"he said.
The Shi'ite groups, closely linked to Iran, are alsotracking his colleagues working 500 km away in the giantsouthern oilfields clustered near Basra - a Shi'ite-dominatedcity that Iraqi officials say is a no-go zone for Westernoilmen.
"The risk is of being in the wrong place at the wrong time,"said a senior oil industry source.
So far, turmoil in Iraq has not hit the operations ofinternational oil companies, or deterred them from boostingoutput and turning Iraq into OPEC's second-biggest producer. ButBaghdad's oil revival has stalled due to bottlenecks at ports,pipelines and the customs office.
"Baghdad will make every effort to contain the fallout, butif we were to lose anyone, there would be huge pressure towithdraw - and we don't want to do that."
An Iraqi Shi'ite militia group has threatened to attack U.S.interests in Iraq and the region if Washington strikes Syria,whose President Bashar al-Assad is backed by Tehran.
Long accustomed to hostile environments, foreign executivesfrom BP, ExxonMobil, Eni, Total and Royal Dutch Shell do not scare easily.
But Iraqi security sources say Exxon, particularly at riskbecause as an American firm, is taking no chances, re-basingmost of its workforce from the southern West Qurna-1 oilfieldproject to Dubai until tensions ease.
"Exxon has zero-tolerance," said a source at a securitycompany operating in Iraq. "Exxon has pulled out just abouteveryone."
The company declined to comment.
Despite the possibility of military action against Syriastill alive, top executives visit Iraq. Paolo Scaroni, CEO ofItaly's Eni, was in Baghdad at the start of the month - andsenior management is staying put in the Iraqi capital.
"The others are reviewing measures and emergency responseplans, but there are no plans to evacuate," said a Westerndiplomat.
ADDITIONAL PRECAUTIONS
Foreign oil companies are likely to take their cue fromdiplomatic staff, say security experts. Several hundred Westernoilmen are estimated to be rotating in and out of the country,with most at the southern oilfields and only a handful inBaghdad, say industry sources.
While Washington is not actively removing people from itsembassy, it is not allowing those away on annual leave toreturn. It has also issued staff with respirators and gas masks.
"We've told our clients to take additional precautions:limit your activities, don't take people in and out of thecountry, keep them off the roads and do everything you can tolimit your exposure," said the security company source.
Since 2010, international oil companies have been tappingthe southern oilfields, raising output by 600,000 barrels perday (bpd) to 3 million bpd.
Infrastructure and logistical snags, rather than securityissues, have frustrated their progress this year.
U.S. oil firms have a fairly small footprint in southernIraq compared with Chinese, Russian and British firms. Exxon isin charge at West Qurna-1, and Occidental has a smallstake in the neighbouring Zubair oilfield, run by ENI.
Other mega-projects in the predominantly Shi'ite andrelatively peaceful south are Iraq's biggest producer Rumaila -run by BP; Majnoon - led by Shell; Halfaya - operated by ChinaNational Petroleum Corp; and West Qurna-2, run by Russia'sLukoil.
But the proximity of these fields to Iran make themvulnerable in the event of a retaliatory attack, securityanalysts say.
Security experts do not expect militants to inflict anylasting damage on Iraq's oil infrastructure, which has helpedgenerate nearly $60 billion this year.
And the remote desert camps at the tightly-guarded oilfieldsoffer expatriates a relatively high level of protection. Most ofthe bases have areas with hardened roofs to guard againstmissile attacks.
Nonetheless, Western executives in the area have been warnedby Iraq's South Oil Co (SOC), which oversees operations aroundBasra, to restrict their movements.
"They'll throw rockets, they'll throw mortars - a fewbombs," said the security source. "It's going to be more of asymbolic attack."