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Kurds Get Seizure Order Thrown Out for Texas Oil Tanker

The SCF Altai tanker, according to media reports, carrying crude oil from Iraqi Kurdistan, is seen anchoring near the southern Israeli city of Ashkelon. Photographer: David Buimovitch/AFP/Getty Images
The SCF Altai tanker, according to media reports, carrying crude oil from Iraqi Kurdistan, is seen anchoring near the southern Israeli city of Ashkelon. Photographer: David Buimovitch/AFP/Getty Images

Aug. 26 (Bloomberg) -- The Kurdistan Regional Government can bring $100 million of crude ashore in Texas after a U.S. judge threw out a court order that would have required federal agents to seize and hold the cargo for the Iraqi Oil Ministry until a court there decided which government owns it.

U.S. District Judge Gray Miller in Houston said he lacked authority under federal laws governing property stolen at sea to decide the dispute. Both Iraq’s central government and the regional government claim control of 1 million barrels of Kurdish crude waiting in a tanker moored in international waters off the Texas coast for almost a month.

Miller ruled yesterday that Iraq’s national oil ministry lost control of the crude when the Kurdish government pumped it without authorization from oilfields in the northern part of the country. Iraq failed to convince Miller that the oil was misappropriated when it was loaded into a tanker in the Mediterranean Sea after being pumped across Turkey in an Iraq-owned pipeline.

“Kurdistan’s unauthorized export of oil over land -– and later overseas –- may violate Iraqi law, but it does not violate U.S. maritime law,” Miller said.

Miller threw out a seizure order issued July 28 by a Houston magistrate judge, who questioned U.S. jurisdiction in the matter while agreeing to store the cargo onshore at Iraq’s expense as the debate continued in that nation’s Supreme Court.

Reparations, Royalties

Kurdistan officials have been fighting the national government over billions of dollars in unpaid war reparations and royalties from oilfields owed by the central government. Attorneys for Iraq’s Oil Ministry had said the only way they could force the Kurdistan Regional Government to appear before the Iraq Supreme Court was to seize the disputed cargo in the U.S.

Phillip Dye, a Houston attorney for the Iraqi Oil Ministry, didn’t immediately respond to phone and e-mail messages after regular business hours yesterday seeking comment on the ruling.

The case is Ministry of Oil of the Republic of Iraq v. 1,032,212 Barrels of Crude Oil, 3:14-249, U.S. District Court, Southern District of Texas (Galveston).

To contact the reporter on this story: Laurel Calkins in Houston at laurel@calkins.us.com

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Peter Blumberg

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