Iraqi Kurds slam Baghdad legal action over oil shipment

Iraq`s Kurdistan region on Sunday slammed legal action filed by the central government against Turkey, saying it was illegitimate and likely to fail, in the latest sign of worsening ties with Baghdad.

Baghdad: Iraq`s Kurdistan region on Sunday slammed legal action filed by the central government against Turkey, saying it was illegitimate and likely to fail, in the latest sign of worsening ties with Baghdad.

The Kurdish Ministry of Natural Resources statement came just days after Baghdad`s Oil Ministry filed a request for arbitration against Ankara at the Paris-based International Chamber of Commerce after crude from Kurdistan was exported to international markets via a Turkish port.

Relations between Iraq and its Kurdish region, and between Baghdad and Ankara, were already fragile and are likely to chill further over the row, with the latest shipments flying in the face of the Iraqi government`s insistence that it has the sole right to sell its prized natural resources.

"The MOO (Ministry of Oil) is, with its behaviour, isolating itself... (and) potentially damaging Iraq`s petroleum industry and Iraq`s petroleum reserves," the statement said.
"The MOO is also... Now prepared to damage Iraq`s relations with Turkey and other friends of Iraq."

The statement said the arbitration request is "self-defeating" and "illegitimate", and that it would "not allow hollow threats from the MOO to interfere with the KRG`s (Kurdistan Regional Government`s) oil export regime."

It also acknowledged that Kurdish authorities had been "exporting oil by trucking through Turkey and Iran for many years," insisting it was done with the knowledge of the federal government.
Baghdad has branded the trucking of oil as "smuggling".

The dispute between Baghdad and Kurdish authorities centres around interpretations of Iraq`s constitution, with both sides insisting they are behaving legally.

The central government insists it has the sole right to export Iraqi crude, and also says contracts between Kurdish authorities and foreign energy firms without its expressed consent are illegal.

But the row took on a new dimension after Turkey confirmed shipments of oil pumped from the autonomous northern Iraqi region and stored at Ceyhan port began on Thursday.

Iraq responded by filing the arbitration request on Friday, asking the ICC to order Turkey and its state-owned pipeline company to "cease all unauthorised transport, storage and loading of crude oil," and added it was seeking financial damages of more than USD 250 million.

Oil expert Ruba Husari said Baghdad`s move "might not stop the exports immediately but it will increase the perception of risk of doing business with KRG."

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