International

US judge signs order to seize Kurdish oil off Texas

A view of the Kawergosk Refinery, some 20 kilometres east of Arbil, the capital of the autonomous Kurdish region of northern Iraq, on July 14, 2014. The International Energy Agency (IEA) said on July 11, that an offensive by jihadists in northern Iraq had cut output by 260,000 barrels a day in June to 3.17 million, after fighting forced the closure of the country's biggest refinery and slashed production from the giant Kirkuk field.

HOUSTON: Acting on a request from the central government in Iraq, a U.S. judge has signed an order telling the U.S. Marshals Service to seize a cargo of oil from Iraqi Kurdistan aboard a tanker off the Texas coast, court filings showed Tuesday.

The United Kalavrvta tanker, carrying some 1 million barrels of crude worth about $100 million, arrived near Galveston Bay Saturday but has yet to unload its disputed cargo.

The ship, which is too large to enter ports near Houston and dock, was given clearance by the U.S. Coast Guard Sunday to transfer its cargo offshore to smaller boats that would deliver it to the U.S. mainland.

But Iraq's central government, in a court filing Monday, laid claim to the cargo that it says was sold by the regional government of Kurdistan without permission from Baghdad, which has said such deals amount to smuggling.

To carry out the order from Magistrate Judge Nancy K. Johnson of the U.S. District Court for the Southern District of Texas, the Marshals Service may need to rely on companies that provide crude offloading services.

The judge's order said the vessel would be allowed free movement after the cargo is unloaded.

The U.S. State Department has expressed fears that independent oil sales from Kurdistan could contribute to the breakup of Iraq, has said the oil belongs to all Iraqis, and warned potential buyers of legal risks.

But it has also made clear it will not intervene in a commercial transaction.

The filings Monday did not name the end-buyer of the cargo in the United States. AET Offshore Services, a company in Texas that had been hired to unload the tanker for the buyer, asked in a separate court filing whether Iraq's claims were valid.

Piecemeal oil exports have gone from Iraqi Kurdistan to Turkey and Iran by truck in the past, which Baghdad also opposed. But the opening of a new pipeline to Turkey earlier this year, which could supply the Kurds with far greater revenues, has met much fiercer opposition from Baghdad.

One cargo of Kurdish crude was delivered in Houston in May to an unidentified buyer, and four other cargoes of Kurdish crude have been delivered this year in Israel.

The case is Ministry of Oil of the Republic of Iraq v. Ministry of Natural Resources of Kurdistan Regional Governate of Iraq et al, U.S. District Court, Southern District of Texas, No. 3:14-cv-00249.

 

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