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Iraq gives warning to confiscate oil shipments, sue dealers

16 Jan 2013
Iraq has threatened for seizing the oil exports made without its consent and sue companies, who are dealing in what it sees as illegal imports crude just days after the country’s self-governing Kurdish region began unilaterally exporting oil. Safeen Dizayee, who the spokesman for Iraq’s Kurdish regional government, made a confirmation on Friday that the largely independent territory began transporting oil to Turkey in the past few days. The move appears to have set off Baghdad’s threat. A statement was silently posted on the website of the State Oil Marketing Organization, a day earlier, warning that Iraq may seize what it sees as oil cargoes, smuggled across borders, and sue the dealers, buyers and the firms that ship the crude. The statement expressed that State Oil Marketing Organization (SOMO) is the sole legally authorized unit that has the right for exporting and importing the crude oil, oil products and gas, in the OPEC member nation. The hard line from Baghdad over the deliveries could worsen rumbling tensions between central government of Iraq and the Kurds. Both of the sides appeared at the edge of war just a couple of months back after an exchange of fire prompted them for deploying troops and heavy weapons along their disputed internal border. The central government of Iraq and the Kurds have been at loggerheads for years about how to manage the huge oil wealth of Iraq. Since the 2003 US-led attack , the Kurds have struck more than 50 contracts with the foreign oil firms, including Chevron Corp., Exxon Mobil Corp. and France’s Total S.A. Baghdad considers the contracts illegal. It has belief that the central government should manage the oil policy of the country and wants that all the exports should be travelled through the state-run pipelines. Dizayee said that the Kurds are transporting the crude from the Taq Taq oil field into Turkey by tanker truck. Much of the exported oil will be purified and then transported back to the Kurdistan, which has a pressing need for fuel during the cold winter month, he added. He insisted that the Kurds remains open to talking to Baghdad about the new exports within the structure of a comprehensive negotiation. He also stated that if they need to address the matter, they need to address it a complete package. The website of Iraq Oil Report, which closely follow the industry and previously noted the SOMO statement, said that near about 15,000 barrels/day have been transported by the Kurds to the Turkish port of Mesfin. If accurate, that would be small portion of the well over 2 million barrels Iraq exports each day. However, Dizayee did not want to reveal the information about the amount of abroad shipment. Last month, the oil exports got suspended by the Kurds, through a pipeline managed by Baghdad over a payment dispute with the central government. Those exports fall under a tentative 2011 contract which calls on the Kurds to send the oil to Baghdad, which sells it out, and pays 50 % of the profits to the oil companies to repay their development costs. Iraq has owned the fourth position amongst the world’s largest proven reserves of conventional crude, with about 143.1 billion barrels. The oil profits make up 95 % of the country’s budget – a portion of which is allocated for the Kurdish region. Source: [Yahoo]
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