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One Kurdish Tanker Waits Off Texas, Another Heads to U.S.

As a tanker filled with disputed Kurdish oil sits off the coast of Texas for a fifth day, another shipment may be making its way to the East Coast.

The Minerva Joy left Dortyol, Turkey, a port used to export oil trucked from the Kurdish region of Iraq, on July 23 and is due to dock in Paulsboro, New Jersey, on Aug. 11, according to shipping data compiled by Bloomberg. It would be the sixth vessel carrying Kurdish oil to the U.S.

Shipping and U.S. customs data show that two of those earlier shipments may have been delivered to LyondellBasell Industries NV (LYB)’s refinery in Houston. The London-based petrochemical company said yesterday it will stop purchasing Iraqi crude after an ownership dispute arose associated with the recent shipments it purchased.

“We have canceled further purchases and will not accept delivery of any of the affected crude until the matter is appropriately resolved,” the company said in a written statement. Lyondell declined to comment on any specifics about the shipments.

On July 28, the Iraqi Oil Ministry persuaded a U.S. judge to order the seizure of 1 million barrels of oil inside a tanker anchored off Galveston, Texas, that it claims was illegally pumped from wells in Kurdistan.

The United Kalavryta is anchored 60 miles southeast of the Texas coast, as it has been since July 28, outside of U.S. territorial waters. The seizure ordered can’t be executed until it crosses that boundary. The ship loaded in Ceyhan, Turkey, where a pipeline from the Kurdish region of northern Iraq terminates.

U.S. Recognition

The U.S. officially recognizes Kurdistan as part of Iraq, although the Kurdish people have jockeyed with the Baghdad-based national government for autonomy for more than a decade. Oil revenue from the northern oil fields could fuel Kurdistan’s fight for independence.

Oil producers are working with the Kurdistan Regional Government to began extracting the estimated 45 billion barrels of reserves in the northern territory. The Kurdish government expanded its control over the resources in early June, when Kurdish Peshmerga armed forces took control of northern Iraq’s key oil hub, Kirkuk, after militants routed the Baghdad government’s army.

Iraq Government

The Iraqi government warned Kurdish officials to stop the exports through Turkey, which began in December, according to the complaint over the United Kalavryta. Gulf Keystone Petroleum Ltd. (GKP), which says it’s the leading operator in the Kurdistan region, said in its April 28 annual report that it began exports of Shaikan crude from the Kurdish region by trucking oil to the port in Dortyol.

Two oil shipments from Dortyol reached the U.S. in May, according to U.S. Customs data. One shipment of 265,167 barrels on board the Marinoula landed in Houston May 1. The other, 265,062 barrels of oil on the Lovely Lady, landed in Houston May 28.

The volumes match imports of Iraqi crude in May in Lyondell filings with the U.S. Energy Information Administration. The U.S. has never imported a barrel of crude from Turkey in EIA data dating back to 2000, and hadn’t received any shipment from Dortyol before crude cargoes starting in May, according to Customs data going back to 2013.

Other Cargoes

Other cargoes loaded in Dortyol have landed or are en route to the U.S. The Nounou brought 254,840 barrels of crude to Philadelphia on June 6, with Axeon Specialty Products LLC listed as the notify party on the bill of lading filed with U.S. Customs. Axeon operates a 70,000-barrel-a-day asphalt refinery in Paulsboro, New Jersey.

Axeon SP buys feedstock from mulitple sources and follows standard background and vetting procedures, spokesman Michael Drager said by e-mail. “Axeon SP does not disclose specific information regarding our commercial transactions and/or private conversations/consultations with any government agency,” he said.

The Minerva Rita may have unloaded petroleum late last month on the Houston Ship Channel after loading in Dortyol in June, according to shipping data compiled by Bloomberg.

The Minerva Joy lists Paulsboro as its destination after apparently filling with petroleum in Dortyol on July 23, according to shipping data. The ship is currently about 100 miles southwest of Portugal.

To contact the reporters on this story: Dan Murtaugh in Houston at dmurtaugh@bloomberg.net; Jack Kaskey in Houston at jkaskey@bloomberg.net

To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net Charlotte Porter

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