Kurdish Crude Oil Tankships: End-Game Still in Doubt

Posted by George Backwell
Friday, August 01, 2014

After a legal show-down in Texas this week, the outlook for a handful of tankers holding some $300 million worth of Kurdish oil is not looking good.

Seemingly unable to find enough buyers willing to take a risk on million-barrel cargoes of disputed crude, the Kurdish authorities are paying over $75,000 a day to keep all three far-flung vessels afloat. A fourth ship began filling up at a terminal on the Turkish coast on Thursday, potentially adding to the tally, Reuters reported.

Unless they can seal last-minute discreet sales or reach some kind of deal with Baghdad over how to share oil revenues, experts say, chances are slim of unloading ships now dotted around the globe, from Texas to Malaysia. In total, they have already been at sea for nearly half a year.

"There will not be many people who will want to take the cargo in circumstances where there is a dispute about the ownership of it," said Ben Knowles of law firm Clyde & Co.

Iraqi Kurdistan is exporting crude oil independently of Baghdad in a bid toward seizing greater political and economic autonomy, in spite of Baghdad's protests that it has the sole authority to sell Iraqi oil.

"As long as the dispute is rumbling on, it would be very difficult for anyone to use the cargo because they will potentially face exposure if they do," Knowles said.

Kurdistan's biggest U.S. buyer LyondellBasell said on Thursday it will not buy any more of the disputed oil.

In the modern maritime world, satellite vessel tracking technology and a globally networked shipping system make it nearly impossible for the Kurds to quietly unload the vessel at some remote port without the intervention of Baghdad, which says the oil has been illegally sold outside its control.

The ships' fate grew dimmer on Tuesday after Baghdad won a U.S. court order to seize one of those tankers, the United Kalavrvta, which had crossed the Atlantic to anchor a few miles off the port of Galveston at the weekend. While the Federal judge said she lacked jurisdiction as the tanker outside U.S. territorial waters, the message was clear.

While shadowy traders or rogue nations may have been willing to take a chance with the oil in the past, at the right price, the cost of crossing Baghdad and irritating Washington is seen as too great for most global companies. And pariah states like North Korea lack the refineries necessary to utilize the crude. That does not seem to be stopping them from trying.

The partial sale is unlikely to alter the tough task ahead for the Kurds.

Even if the half-cargo gets sold, "the Kurds will get a lower price selling in this kind of way and won't be anywhere next to the market rates they want to achieve," said Richard Mallinson with consultants Energy Aspects in London.

"It has proved to be more difficult than they expected because Baghdad has used a combination of diplomatic pressure with governments it has relations with, legal warnings to potential buyers and the action with the tanker in the U.S. That will have sent a message to most buyers," Mallinson said.

The Kurds have seized on recent sectarian chaos in Iraq to expand their autonomous northern territory to include Kirkuk, which sits on vast oil deposits.

(By Jonathan Saul)

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter January 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

‘Choice Alliance’ Formed to Serve BWT Market

A strategic alliance between Choice Ballast Solutions and Drew Marine has been formed to provide vertically integrated capabilities within the ballast water treatment (BWT) market.

Voyager IP Launches Prepaid VSAT and IT Scheme

A new scheme by marine broadband solutions company Voyager IP aims to alter the way customers can keep track of their VSAT and IT support services.   The Irish-based

Grounded Giant Chinese Boxship Freed

One of the world's largest container ships has been freed from a mud bank after running aground almost a week ago near Germany's largest port of Hamburg, German authorities said on Tuesday.

Legal

Noncompliant Cargo Ship Banned from Australia

The 86-meter general cargo ship Noah Satu has been prohibited from entering or using any Australian ports for the second time in less than 12 months, following another round of safety,

Grounded Giant Chinese Boxship Freed

One of the world's largest container ships has been freed from a mud bank after running aground almost a week ago near Germany's largest port of Hamburg, German authorities said on Tuesday.

Migrants Reaching Europe by Sea Soars 10-fold

Ten times as many migrants and refugees arrived in Europe by sea in the first six weeks of the year as in the same period of 2015, and the number of deaths also soared,

Tanker Trends

EU Pulls Plug on Back-Up Nav System

A British-led initiative to create a back-up to satellite navigation systems for ships has been pulled after failing to garner interest from other European countries,

IOCs Stress on OSV Fuel Management Performance

Growing insistence by international oil companies (IOCs) that oilfield contract vessels (OSVs) are fitted with fuel monitoring systems has prompted an upsurge in

Hess sells Shannon LNG Terminal

New York-based energy company Hess has sold Shannon LNG, a proposed gas-import terminal in County Kerry, Ireland’s Sunday Independent has reported.   The newspaper

Energy

Wood Group Extends North Sea Chevron Contract

Wood Group has secured an extension to continue to support Chevron Upstream Europe across four offshore assets in the North Sea. Wood Group PSN (WGPSN) will deliver

QP, Chevron Ink Offshore Moroccan Deal

Qatar Petroleum has reached an agreement with Chevron Morocco Exploration Ltd., a subsidiary of Chevron Corporation, to acquire a 30% participating interest from

IOCs Stress on OSV Fuel Management Performance

Growing insistence by international oil companies (IOCs) that oilfield contract vessels (OSVs) are fitted with fuel monitoring systems has prompted an upsurge in

Fuels & Lubes

SevenCs Supports MariGreen Project

SevenCs is part of the EU INTERREG V A cross-border project “MariGreen” to support the maritime industry in the transition towards more efficient, greener and more sustainable shipping.

LNG Bulker Cements Thordon's Green Future

Sea trials aboard Greenland, the world’s first LNG-fuelled short-sea dry bulk vessel, have validated the performance of Thordon Bearings COMPAC propeller shaft solution,

Norway will be Lithuania's 2016 Top Gas Supplier

Lithuania will import more gas from Norway than from former sole supplier Russia in 2016 after developing infrastructure to support liquefied natural gas (LNG) imports,

Vessels

Noncompliant Cargo Ship Banned from Australia

The 86-meter general cargo ship Noah Satu has been prohibited from entering or using any Australian ports for the second time in less than 12 months, following another round of safety,

First Damen Tug for Fratelli Neri

Fratelli Neri S.p.A has taken delivery of a Damen ASD Tug 3212. The new vessel, called Luisa Neri, was handed over from Damen Maaskant Shipyards Stellendam in the Netherlands, on 25 January 2016.

Wärtsilä's' BWMS for New Crane Ship Design

A new crane ship designed by Netherlands based Royal IHC, a global leader in offshore, dredging and mining vessels, will feature the Wärtsilä Aquarius UV Ballast Water Management System (BWMS).

Government Update

Migrants Reaching Europe by Sea Soars 10-fold

Ten times as many migrants and refugees arrived in Europe by sea in the first six weeks of the year as in the same period of 2015, and the number of deaths also soared,

EU Pulls Plug on Back-Up Nav System

A British-led initiative to create a back-up to satellite navigation systems for ships has been pulled after failing to garner interest from other European countries,

N.Korean Navy Incursion Draws Warning Shots

A North Korean patrol boat crossed into South Korean waters early on Monday and retreated after the South Korean navy fired warning shots, a South Korean military official said.

 
 
Maritime Careers / Shipboard Positions Maritime Standards Naval Architecture Pipelines Port Authority Salvage Ship Electronics Ship Repair Ship Simulators Winch
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: 0.1097 sec (9 req/sec)