Iraq renews its threats to take legal action against crude supplies buyers from Kurdistan Region

A flame rises from a chimney at Taq Taq oil field in Erbil, in the Kurdistan region, Aug. 16, 2014. (Reuters)

SULAIMANI (ESTA) — Iraq’s state-owned oil marketer SOMO has renewed its threats to take legal action against buyers of crude oil originating from the Kurdistan region, according to Reuters.

Reuters on Thursday reported that it has seen a letter dated Aug. 23 that marketer SOMO has threatened fresh legal action against buyers of crude supplies from the Kurdistan Region.

Iraq has recently made fresh attempts to control revenue from the Kurdistan Region by urging oil and gas firms operating there to sign new contracts with state-owned marketer SOMO rather than the Kurdistan Regional Government (KRG).

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.

The KRG has been developing oil and gas resources independently of the federal government, and in 2007 enacted its own law that established the directives by which the region would administer them.

In February, Iraq’s federal court deemed the oil and gas law regulating the oil industry in Kurdistan unconstitutional and demanded that the KRG hand over their crude supplies.

The Kurdistan Regional Government 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,” Reuters cited the letter as saying.

“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 said.

The KRG declined to comment.

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.






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