Iraq threatens to seize oil shipments, sue dealers

Published on NewsOK Modified: January 11, 2013 at 7:06 am •  Published: January 11, 2013

BAGHDAD (AP) — Iraq has threatened to seize oil exports made without its consent and sue companies dealing in what it sees as contraband crude just days after the country's self-rule Kurdish region began unilaterally exporting oil.

The spokesman for Iraq's Kurdish regional government, Safeen Dizayee, confirmed Friday that the largely autonomous territory began shipping oil to Turkey in the past few days.

The move appears to have triggered Baghdad's threat. A statement quietly posted a day earlier on the website of the State Oil Marketing Organization warned that Iraq may confiscate what it sees as oil cargoes "smuggled across borders," and sue sellers, buyers and companies that transport the crude.

The statement said SOMO "is the sole legally authorized entity that has the exclusive right to export and import crude oil, gas and oil products" in the OPEC member nation.

A hard line from Baghdad over the shipments could exacerbate simmering tensions between Iraq's central government and the Kurds. The two sides appeared on the brink of war just two months ago after an exchange of fire prompted them to deploy troops and heavy weapons along their disputed internal border.

Iraq's central government and the Kurds have been at loggerheads for years about how to manage Iraq's vast oil wealth.

Since the 2003 U.S.-led invasion, the Kurds have struck more than 50 deals with foreign oil companies, including Exxon Mobil Corp., Chevron Corp. and France's Total S.A. Baghdad considers the deals illegal. It believes the central government should manage the country's oil policy and wants all exports to travel through state-run pipelines.