Kurds Ask US Court to Scrap Seizure Order, Allow Crude Delivery

Posted by Eric Haun
Monday, August 04, 2014

The Kurdistan Regional Government (KRG) of Iraq asked a U.S. court on Monday to throw out an order to seize some 1 million barrels of disputed crude oil and allow the cargo to be freely delivered in Texas.

The United Kalavrvta tanker, carrying about $100 million worth of Kurdish crude, has been anchored near Texas for nine days, as the Iraqi region of Kurdistan wages a legal battle over ownership with the central government of Iraq.

At the request of Baghdad, the U.S. District Court for the Southern District of Texas ordered the U.S. Marshals Service to take control of the cargo last week, but then said the tanker was outside its jurisdiction and beyond U.S. territory in the Gulf of Mexico.

KRG said the court lacked the authority to sign the order in the first place, claimed the right to export oil under Iraq's constitution, and said it plans to deliver the oil soon.

"The cargo has not yet been transshipped and brought into U.S. territory, but the KRG expects that it will enter the territorial jurisdiction of the Southern District of Texas in the near future," the filing said.

The tanker is too large to enter the port of Galveston near Houston and companies that provide offloading services to bring cargoes ashore have steered clear of the dispute.

Arguing that all oil sales outside its control are illegal, Baghdad last week filed a lawsuit to gain control of the cargo aboard the United Kalavrvta tanker.

Last week, U.S. refiner LyondellBasell said it had recently bought cargoes of Iraqi Kurdistan crude but said it would halt future purchases and not accept any deliveries until the dispute is settled.

The company did not explicitly say if it had agreed to buy the crude on the United Kalavrvta.

(Reporting By Terry Wade and Anna Driver; additional reporting by Patience Haggin)

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