Iraq threatens new legal action against Kurdistan crude buyers

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Iraq’s state-owned oil marketer SOMO has threatened fresh legal action against buyers of crude oil originating from the semi-autonomous Kurdistan region, according to a letter dated Aug. 23 seen by Reuters.

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The letter is the latest in a series of moves by Iraq’s oil ministry to try to control oil revenue from the Kurdistan region.

A February ruling by Iraq’s Federal Supreme Court deemed the legal foundations of the Kurdistan region’s oil and gas sector unconstitutional.

The Kurdistan Regional Government (KRG) has repeatedly rejected the ruling.

“Firm legal action shall be made against all parties involved, in order to block loadings of those unlawful cargoes originating from Iraq, including but not limited to those from the Kurdistan region,” the letter said.

“The Iraqi federal ministry of oil and SOMO as its affiliate reserve the right to take all legal measures against any dealer or buyer of smuggled crude oil that has been proven to have loaded Iraqi oil from, precisely, Turkey’s Ceyhan Oil Terminal, without the explicit endorsement of SOMO,” it stated.

The KRG was not immediately available for comment.

The action mirrors a similar move by Iraq’s oil ministry in 2014 to block vessels loading crude from the Kurdistan region from unloading at foreign ports.

Iraq has made several bids to enforce the February court ruling.

It has summoned several firms operating in the Kurdistan region to commercial court sittings, which have been repeatedly postponed, and introduced a policy to blacklist oilfield service firms if they did not withdraw from the Kurdistan region.

The latest blacklisted oilfield services firms include Weatherford International and Dubai-based OIL SERV, according to a source familiar with the matter.

The firms did not immediately respond to requests for comment.

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