Update: U.S. to Seize Kurdish Oil from Tanker off Texas

Posted by Joseph Keefe
Tuesday, July 29, 2014

U.S. authorities are set to seize a cargo of oil from Iraqi Kurdistan anchored off the Texas coast after a judge approved a request from Baghdad, raising the stakes in an oil sales dispute between Iraq's central government and the autonomous region.

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

The U.S. judge's approval of the request from Baghdad deals another blow to the Kurdistan Regional Government's (KRG) attempts to establish its own oil sales, which are seen as a crucial step in the autonomous region's push for independence.

Baghdad, which is struggling to contain a Sunni Islamist insurgency that has captured swathes of central and northern Iraq, sees such oil sales as smuggling.

It has cut the KRG's budget since the start of the year over the oil sales dispute. Washington has opposed the KRG's oil sales, fearing they could contribute to a break-up of Iraq, but has stopped short of banning U.S. companies from buying the oil.

The judge's order was issued to the U.S. Marshals Service, an enforcement agency within the U.S. Department of Justice.

"Although the U.S. government did not act to stop the tanker, Baghdad has been able to make use of the U.S. courts," said Richard Mallinson at UK-based consultancy Energy Aspects.

"The question is now whether the KRG has anything left up its sleeve to either overcome this legal obstacle or to find buyers elsewhere in the world. The prospects for the Kurds putting oil exports on a sustainable footing without Baghdad's approval are looking increasingly dim."

A spokesman for the KRG's Ministry of Natural Resources did not immediately respond to requests for comment.

CNBC News said documents showed the buyer of the oil was a British Virgin Isles-registered company called Talmay Trading, which has previously traded Russian crude. Reuters was not immediately able to confirm the report.

Legal Dispute
The ship, which is too large to enter ports near Houston and dock, was given clearance by the U.S. Coast Guard on 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 on Monday, laid claim to the cargo.

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 filings on 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.

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

The U.S. State Department 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.

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.

At least one cargo of Kurdish crude was delivered to the United States in May to an unidentified buyer, and four other cargoes of Kurdish crude have been delivered this year in Israel.

One Kurdish tanker of crude pipelined to Ceyhan, the United Leadership, has been stuck off the coast of Morocco for more than a month.

Another, the United Emblem, has sailed to Asia, and is anchored about 15 miles (24 km) off the coast of Malaysia according to Reuters AIS Live tanker tracking after passing through the Singapore Strait, a key oil trading hub.

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.


By Terry Wade and Julia Payne
 

Maritime Reporter April 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

1,000th Becker Mewis Duct to Be Presented at Nor-Shipping

Hamburg-based Becker Marine Systems will present its 1,000th Becker Mewis Duct in Oslo at Nor-Shipping 2015.   The use of all ducts previously delivered will have lowered CO2 by more than 1.

Shell Declares Force Majeure on Forcados Crude Exports

Shell has declared force majeure on exports of Nigeria's Forcados crude oil stream, a spokesman for the company said on Wednesday.   It declared force majeure

IMCA Publishes Security, Emergency Guidance

The threat to maritime security from piracy, terrorism, criminal acts, and hostage and kidnapping threats continues to pose challenges to ships’ owners, masters and crew members,

Legal

Suspected Migrant Smugglers Arrested

German police arrested three men on Wednesday suspected of belonging to an organised criminal group that smuggles people from Africa to the European Union.   Around 7,

US Navy Settles Environmental Violations

A settlement between the U.S. Environmental Protection Agency and U.S. Navy will help reduce potentially harmful discharges of ozone-depleting substances and ensure

Maersk Issues 'letter of undertaking' to Iran

Maersk Line said on Wednesday it had provided a letter of undertaking in relation to uncollected cargo that has led to the seizure by Iranian authorities of the vessel Maersk Tigris.

Finance

Japan to Hand Over Data Ahead of Australia Submarine Bid

Japan will agree this month to give Australia classified submarine data, an unprecedented step signalling Tokyo's intent to join competitive bidding to sell Canberra a fleet of stealth subs,

Maersk Issues 'letter of undertaking' to Iran

Maersk Line said on Wednesday it had provided a letter of undertaking in relation to uncollected cargo that has led to the seizure by Iranian authorities of the vessel Maersk Tigris.

Iran: Maersk Boxhip Dispute Near Settlement

Iran said on Wednesday a legal settlement could be reached soon over its seizure of the Marshall-Islands flagged Maersk Tigris container ship in the Strait of Hormuz last month,

News

India, Iran Ink Port Deal Despite US Warning about Haste

India reached a deal on Wednesday to develop a strategic port in southeast Iran despite U.S. pressure not to rush into any such trade agreements before world powers

First Foreign Tanker Docks at Derna Since January Air Strike

Libya has persuaded a foreign shipper to send a tanker to the eastern port of Derna for the first time since a warplane belonging to the official government bombed

Blyth Workcats Delivers Aqualink

The first two-deck boat ever built by Blyth Workcats has recently been delivered to a customer in Belgium. The 18-meter Aqualink is the first Blyth Workcat to feature

Coast Guard

Libya's Coast Guard Detains Almost 600 African Migrants

Libya's coast guard detained on Wednesday almost 600 illegal African migrants, among them pregnant women and 18 children, who had tried to sail to Europe on a fishing boat, a security official said.

Philippines, Japan Coast Guards in Anti-Piracy Drills

Philippine and Japanese coast guard teams staged an anti-piracy drill on Wednesday, featuring the storming of a cargo vessel after a mock hijack, in a show of maritime

Maersk Issues 'letter of undertaking' to Iran

Maersk Line said on Wednesday it had provided a letter of undertaking in relation to uncollected cargo that has led to the seizure by Iranian authorities of the vessel Maersk Tigris.

People in the News

At Greek port, Migrants Try for Italy

Rapper Mahdi Babika Mohamed's journey to a better life in Europe started in his native Sudan and passed through Libya and Turkey before abruptly ending in a squalid

Philippines, Japan Coast Guards in Anti-Piracy Drills

Philippine and Japanese coast guard teams staged an anti-piracy drill on Wednesday, featuring the storming of a cargo vessel after a mock hijack, in a show of maritime

Maersk Issues 'letter of undertaking' to Iran

Maersk Line said on Wednesday it had provided a letter of undertaking in relation to uncollected cargo that has led to the seizure by Iranian authorities of the vessel Maersk Tigris.

Government Update

India, Iran Ink Port Deal Despite US Warning about Haste

India reached a deal on Wednesday to develop a strategic port in southeast Iran despite U.S. pressure not to rush into any such trade agreements before world powers

US Navy Stops Accompanying Ships through Strait of Hormuz

The U.S. Navy has stopped accompanying commercial ships through the Strait of Hormuz, a mission it began last week in the wake of Iran's seizure of a cargo ship, the Pentagon said on Wednesday.

US Navy Settles Environmental Violations

A settlement between the U.S. Environmental Protection Agency and U.S. Navy will help reduce potentially harmful discharges of ozone-depleting substances and ensure

 
 
Maritime Contracts Maritime Security Maritime Standards Naval Architecture Pipelines Port Authority Ship Electronics Ship Repair Ship Simulators Shipbuilding / Vessel Construction
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2254 sec (4 req/sec)