MESOP FOCUS : Baghdad ‘Cannot Win’ in Tanker Claim, Hawrami Warns

By RUDAW 30-7-2014 – ERBIL, Kurdistan Region – The Kurdistan Region’s energy minister said Wednesday that Iraq has filed a lawsuit in the United States to seize Kurdish oil on a tanker anchored in the Gulf of Mexico, but that it “cannot win.”

“The KRG’s lawyers sent a letter to a court in Texas to explain the misrepresentations of the Iraqi federal government,” said Ashti Hawrami, minister of natural resources in the Kurdistan Regional Government. “The Iraqi federal government has petitioned a Texas court for an order to seize crude oil legally produced, exported, and sold by the KRG in accordance with the Iraqi constitution and law. The letter indicates the possibility of massive counterclaims against the federal government,” Hawrami said in a statement on the KRG’s website. “The federal government of Iraq is trying to achieve in foreign courts and in the Iraqi Supreme Court what is denied to the federal government by the Iraqi constitution,” Hawrami said.

“The federal government cannot win, because 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,” the minister added.“Our claims for unpaid compensation, which must be paid as provided in the Iraqi constitution and the law, will also be before any foreign court in which the federal government is seeking to attack us,” Hawrami warned.His comments came after a US judge refused permission to the United Kalavrvta tanker to unload its cargo of Kurdish crude in the United States.

Federal magistrate Nancy K. Johnson said the tanker is not under the jurisdiction of the United States, given that it is outside territorial waters and is not permitted to unload its cargo.The dispute over the shipment, which was some 100 kilometers offshore Texas, should be resolved in Iraq between the Iraqi government and the Kurdistan autonomous region, Johnson said.On Monday, the judge issued an order for US Marshals to seize the one million barrels of crude from the United Kalavrvta, but later decided that was not enforceable.Also on Monday, lawyers representing the Iraqi government filed a lawsuit saying the Kurds had sold the oil without permission from the central government, Reuters reported.

Johnson has scheduled a conference for the two sides to present their case.Lawyers said the tanker could sail away, or offload its cargo for delivery at another US Gulf of Mexico port outside of Texas. Iraq’s Oil Ministry has threatened to sue anyone who purchases oil from the Kurdistan Region after the KRG struck deals to sell crude oil via Turkey without first receiving Baghdad’s approval. The KRG has accused Baghdad of using bullying tactics to stop its oil sales and maintains that it will only keep the 17 percent share of the oil revenue sales, in line with the Iraqi constitution.

The United States has warned against purchasing crude oil from Iraqi Kurdistan because of the potential legal implications from Baghdad. The United Leadership tanker carrying Kurdish crude appeared to be bound for the US in June but ended up in Morocco. Marie Harf, deputy spokesperson for the State Department, told Rudaw that the State Department does not necessarily deem sales of crude oil from Iraqi Kurdistan illegal, but “there’s a legal dispute process here, an arbitration mechanism. There will be a legal ruling on it.” Landing crude in the US is an important issue for Iraqi Kurdistan, which is trying to establish its own oil trade and is in dire need of revenue since Baghdad cut the region’s funding in January. The feud worsens as Baghdad-Erbil relations are already at rock bottom, and the Kurds are planning an independence referendum to break away from Iraq.