Iraq oil dispute hits US coast

Iraq’s semi-autonomous Kurds reasserted their right to sell $100 million of crude on board a tanker off the Texas coastline after the government in Baghdad persuaded a U.S. judge to order the cargo’s seizure.

The Kurdistan Regional Government wrote to the U.S. court claiming “misrepresentations” by the central government, it said in an e-mailed statement. The letter was written after Iraq’s government filed a complaint in a Houston federal court alleging that the Kurds “misappropriated” more than 1 million barrels of oil from northern Iraq.

Magistrate Judge Nancy Johnson yesterday authorized marshals to seize the cargo on the tanker while the dispute is resolved. The ship, the United Kalavryta, is about 60 miles from Galveston, Texas and can only be seized should it enter U.S. territorial waters, she said. The KRG will seek compensation in any court where Kurdish oil sales are challenged, Ashti Hawrami, KRG minister of natural resources, said in the statement.

Oil revenue from the Kurdish region, which holds 45 billion barrels of oil reserves, could help the Kurds’ decades-long quest for greater independence. The U.S. recognizes the region as part of Iraq.

The Iraqi government warned Kurdish officials to stop the allegedly “illegal” exporting through Turkey, which began in December, according to the complaint. The crude shipment left Ceyhan, Turkey, on June 23, and has “changed destinations multiple times” while at sea, according to the filing. The vessel’s name is also spelt United Kalavrvta in some shipping databases.

“Our crude is legally produced, shipped, exported, and sold in accordance with the rights of the Kurdistan Region as set forth in the Iraqi constitution,” Hawrami said.

The primary case is Ministry of Oil of the Republic of Iraq v. 1,032,212 Barrels of Crude Oil Aboard the United Kalavrvta and the Ministry of Natural Resources of the Kurdistan Regional Governate of Iraq, 3:14-249, U.S. District Court, Southern District of Texas (Galveston).

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Comments
comments powered by Disqus