Destiny of Kurdish oil tanker in Texas still unkown
Buyer of Kurdish crude oil is Talmay Trading of the British Virgin Islands
The buyer of Kurdish crude oil sitting off the coast of Texas is a company called Talmay Trading of the British Virgin Islands, CNBC has learned.
According to documents seen by CNBC, Talmay, using a London shipbroker, hired AET Offshore Services of Dallas, Texas, on July 17, 2014, to unload roughly 1 million barrels of crude in the United Kalavytra, currently located off the coast of Texas near Galveston.
Efforts to reach the ship broker were unsuccessful.
Talmay may never get custody of the oil because a Texas judge has ordered U.S. marshals to seize the cargo at the request of the Iraqi government.
The crude is controversial because the Iraqi Kurdistan Region drilled and shipped the oil in defiance of the Iraqi central government, who says the shipment is a violation of the Iraqi constitution.
In a court filing on Monday, Iraq laid claim to the cargo that it says was sold by the regional government of Kurdistan without permission from Baghdad, which has said such deals amount to smuggling.
To carry out the order from Magistrate Judge Nancy K. Johnson of the U.S. District Court for the Southern District of Texas, the Marshals Service may need to rely on companies that provide crude offloading services.
The judge's order said the vessel would be allowed free movement after the cargo is unloaded.
The case is Ministry of Oil of the Republic of Iraq v. Ministry of Natural Resources of Kurdistan Regional Government of Iraq (KRG) et al, U.S. District Court, Southern District of Texas, No. 3:14-cv00249.
Talmay appears to have additional offices in Dubai and Moscow, and historic news reports show it has traded in Russian oil from the Urals.
Commenting on the issue, Kurdistan’s Minister of Natural Resources Ashti Hawrami said on Wednesday, July 30, 2014 “the KRG’s lawyers sent a letter to a court in Texas to explain the misrepresentations of the Iraqi federal government. The Iraqi federal government has petitioned a Texas court for an order to seize crude oil legally produced, exported, and sold by the KRG in accordance with the Iraqi constitution and law.”
“The letter indicates the possibility of massive counterclaims against the federal government,” said Minister Hawrami. “The federal government of Iraq is trying to achieve in foreign courts and in the Iraqi supreme court what is denied to the federal government by the Iraqi constitution. The federal government cannot win, because our crude is legally produced, shipped, exported, and sold in accordance with the rights of the Kurdistan Region as set forth in the Iraqi constitution,” continued Minister Hawrami. “Our claims for unpaid compensation, which must be paid as provided in the Iraqi constitution and the law, will also be before any foreign court in which the federal government is seeking to attack us,” Minister Hawrami continued.
Commenting on this issue Turkish Foreign Minister Taner Yildiz told reporters in Kayseri, Turkey on Wednesday that Ankara will respect the federal Iraqi government's decision amid lingering obstacles in international markets regarding the sale of Kurdish crude to global buyers via Turkey.
“Whether they [the US] ban this [selling Kurdish oil] in Texas or other countries do the same; the crude belongs to Iraq and the federal constitution will decide on future sales. The Baghdad central gov- ernment and Kurdish authorities will find a way to share this oil, and Turkey is only a third party here,” Yıldız explained. The minister on Wednesday was quoted as saying that he “finds the Texas court ruling odd.”
Yıldız also dismissed earlier reports in Turkish media that said further bans on Kurdish oil sales would cost Turkey as much as $100 billion in the loss of crude transfer revenues. Ankara has not disclosed the amount of money charged to the Kurds for the transfer of crude from the Mediterranean port of Ceyhan.
Iraqi Trade Minister Khairalla Hassan, on the other hands, argues that the decision by the Texas court is not final and the tanker is only “on hold” till the case is settled.
Minister Hassan believes that the case will most probably be settled in the interest of Kurdistan Region since the Federal Court of Iraq already acknowledged the legality and constitutionality of production and export of Kurdistan’s oil by KRG.
He also added that despite this fact, the crude may lose its value by the time the court case is settled due to the high costs of keeping the crude in the tanker floating on the waters, but more important for Kurdistan will be the court decision.
“If the decision is in the interest of the Kurds, then this will be a big victory for the Kurds and recognition that what they are doing is constitutional and legal,” Minister Hassan argued.
Experts believe if the U.S. buys oil from Kurds, other countries around the world would do the same and if Kurds can sell their oil independent of Baghdad, they will be one more step closer to independence.