Texas tanker said still in limbo as Iraq seals Kurdish oil deal
Texas tanker said still in limbo as Iraq seals Kurdish oil deal
LAUREL BRUBAKER CALKINS
KURDISTAN, Iraq (Bloomberg) -- The Iraq Oil Ministry’s production accord with the Kurdistan Regional Government hasn’t resolved their U.S. court fight over a tanker of crude that has lingered off the Texas coast since July, a person familiar with the matter said.
The tanker loaded with a million barrels of Kurdish crude went to sea before the deal was signed on Dec. 2. After a closed-door meeting yesterday with U.S. District Judge Gray Miller in Houston, Hal Watson, the KRG’s lead lawyer, declined to comment on whether the Kurds will keep trying to bring the stranded cargo into the U.S. Jim Loftis, Iraq’s lead lawyer, said he discussed the accord with the judge and KRG’s attorney.
The Iraqi central government has been trying to seize the $100 million cargo of the United Kalavryta for more than four months to prevent the KRG from cracking U.S. oil markets. Energy companies have been reluctant to accept oil Iraq claims was exported from Kurdistan without its consent.
The tanker has been slowly circling a tracking buoy about 60 miles off Galveston, Texas, awaiting a decision. The ship’s location and draft, an indication of how much cargo it’s carrying, were unchanged as of Dec. 2, according to Bloomberg tracking data.
The judge asked the lawyers to update him on the status of their dispute in “a week or so,” Loftis said. Watson declined to comment on whether a deal had been reached on the tanker.
Kurdistan
The U.S. government recognizes Kurdistan as part of Iraq and has tried to distance itself from the dispute. The Iraqi Constitution states that oil resources belong to all Iraqi people, according to the Oil Ministry.
KRG said Kurds have the right to exploit their own oilfields to finance a struggle for independence, and their fight against Islamic State militants trying to overtake the region.
Iraq, which last year suspended billions of dollars in payments owed the KRG for oil royalties and war reparations, agreed on Dec. 2 to resume some payments and let the Kurds export up to 550,000 bpd through Turkey, said KRG spokesman, Safeen Dizayee.
The production-sharing compromise places 250,000 bbl of that daily amount under the control of the Iraqi central government, according to a statement from Iraqi Prime Minister Haidar Al Abadi’s office.
The case is Ministry of Oil of The Republic of Iraq v. 1,032,212 bbl of Crude Oil, 3:14-249, U.S. District Court, Southern District of Texas (Galveston).
