Iraq Sues Greek Shipping Firm for Transporting KRG Oil

Source: Reuters 9/4/2014, Location: Middle East

Iraq said it filed a lawsuit against Greek shipping company Marine Management Services (MMS) for its role in the export of crude from the Kurdistan region, which Baghdad says is illegal.

The case is the latest move by Baghdad to deter customers and thwart independent exports of crude from the autonomous Kurdistan region. The federal government claims sole authority to manage sales of all the oil in Iraq.

The Iraqi oil ministry said on Thursday that MMS operated five vessels that had transported oil on behalf of the Kurdistan Regional Government (KRG) from a Turkish port.

"MMS has actively facilitated the KRG's illegal export scheme, repeatedly ignoring warnings that the crude oil it was carrying does not belong to the KRG," it said in a statement, which did not specify when and where the case was filed.

"MMS is liable for damages of at least $318 million, and possibly significantly more, as a result of its willing and active participation in the KRG's illegal crude oil export scheme."

Athens-based ship manager MMS said it was not aware of any suit filed by the Iraqi government and maintained it was simply carrying out its business of transporting goods.

"We are not a party to this dispute, and any lawsuit filed against us by the Iraqi government is misdirected and ill-advised and will be robustly defended for lacking any basis and foundation," MMS said in a separate statement.

"The goods in this case are crude oil, which the KRG claims is rightfully theirs."

MMS said if there was a dispute over the ownership of the cargoes, it had to be resolved between the government in Baghdad and the KRG "either through a political or failing that a judicial process".

The Kurds began exporting oil in May via an independent pipeline, which links up with an Iraqi pipeline at the Turkish border to terminate at the Mediterranean port of Ceyhan. More than 10 million barrels of oil have been shipped from the port since then, Turkey's energy minister said.

Kurdish officials could not immediately be reached for comment.

The Iraqi oil ministry said MMS had declared false destinations for its tankers, turned off its ships' tracking systems to avoid detection and undertaken ship-to-ship transfers of oil on the high seas at night, a process it described as "dangerous".

One of MMS's tankers, the United Kalavrvta, has been anchored off the coast of Texas since July laden with $100 million worth of crude. Baghdad has threatened to sue anyone who buys the oil and has asked a U.S. court to seize the vessel's contents. A Texas court has said it lacks jurisdiction because the tanker is offshore.

Disputes over contested oil shipments are not uncommon.

Two years ago, two tankers holding oil from South Sudan were held up for months in Asia due to a dispute over oil revenues between Sudan and its landlocked neighbour South Sudan.

Sudan had seized the oil and loaded the consignments onto the tankers for what it called unpaid transit fees. The spat was resolved after both sides agreed that Sudan would pay back proceeds from the two oil shipments as well as reaching an accord over a metering system over oil exports.


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