LONDON: The Iraqi government has hired a law firm to target any buyer of what it considers illegally exported Kurdish crude oil, a Baghdad official said, toughening its tactics in a struggle to halt the northern region’s drive for economic independence.
For the past year, the Kurdish Regional Government (KRG) has trucked about 60,000 barrels per day (b/d) of crude to Turkish ports, avoiding the Baghdad-run Iraqi pipeline system as it tries to gain more control over oil revenues.
The central government threatened to sue over the shipments in a long-running dispute that talks between Baghdad and Arbil have so far failed to settle, but it took no legal action.
However, Baghdad is now preparing to act because it says the Kurds have raised the stakes by building a new pipeline linking their semi-autonomous landlocked region to Turkey.
Iraq’s oil ministry instructed legal firm Vinson and Elkins about two months ago to pursue anyone who buys oil pumped down the pipeline to the Turkish city of Ceyhan, near the Mediterranean, a senior Iraqi oil official said.
“This is not a game. Anyone who buys this oil is doing something illegal,” said the official. “We will target the companies because they are the ones who will monetise and pay for the Kurdish oil. How else can it get onto the market?”
Vinson and Elkins, which has represented the Iraqi government in the past, declined to comment.
Baghdad turned a blind eye to small trading companies that have bought barrels via regular tenders and trucked them across the border. Those tenders are still taking place.
But while the trucked amounts are relatively modest, Baghdad realised the Kurds were serious about independent exports when they sent test shipments down the pipeline in early December.
“You can’t compare general trucking of 60,000 barrels or less to significant exports through a pipeline system,” the senior Iraqi official said. “We have a bilateral, international agreement with Turkey — ratified by parliament — that does not allow the Iraq-Turkey pipeline to be used by a third party without the consent of the Iraqi government.”
Reuters
