U.S. Lets Iraq Seize Kurdish Oil Near Texas

GALVESTON, Texas (CN) - As sectarian violence rages, Iraq's government on Monday sued Kurdistan in Federal Court, demanding 1 million barrels of crude oil onboard a tanker near Texas.

The Ministry of Oil of the Republic of Iraq (MoO) sued the Ministry of Natural Resources of the Kurdistan Regional Governate of Iraq, and the 1,032,212 Barrels of Crude Oil Aboard the United Kalavrvta, claiming that the oil "belongs to the people of the Republic of Iraq."

The United Kalavrvta is a Marshall Islands-flagged tanker.

The Kurdistan Regional Government is a semi-autonomous entity that controls oil-rich northeastern Iraq. Kurdistan has been a region of relative calm as ISIS rebels have devastated the country in a march toward Baghdad.

The 1 million barrels of oil came from wells in Kurdistan-controlled Iraq, according to the lawsuit.

"In December of 2013, without the consent of the MoO ... the Kurdistan Regional Government began pumping the illegally produced crude oil through a pipeline originating in Iraq and running to Ceyhan in Turkey," the complaint states.

Iraq clams it told the pipeline operator to hold the crude, but at the instruction of the Kurdish government the operator loaded the oil onto the United Kalavrvta.

The tanker then headed for Augusta, Ga. but changed its destination to Galveston mid-trip, according to the complaint.

Coast Guard Petty Officer Andy Kendrick told the Los Angeles Times the tanker arrived off the Port of Galveston last weekend and is 30 to 60 miles offshore.

Iraq's government claims that under the country's constitution it owns the oil.

After the United States ousted Saddam Hussein, the U.S. military helped establish Iraq's constitution, during an 8-year occupation of the country and a war that claimed the lives of 4,486 U.S. soldiers.

The Iraqi government is now clinging to power amid intense fighting spurred by the Islamic State, formerly known as ISIS, an al-Qaeda offshoot that is killing hundreds of people in its quest to establish a caliphate in Iraq and Syria.

Though its grip on the nation is tenuous, Iraq's government claims in the lawsuit it is "the sole legitimate government of the entire territory of the Republic of Iraq. Pursuant to the laws of the Republic of Iraq, plaintiff MoO must approve the storage, transport, export or sale of any oil products belonging to the people of the Republic of Iraq, including the crude oil contained in the subject cargo."

Iraq's oil ministry asked the court for an arrest warrant for the crude, which U.S. Magistrate Judge Nancy Johnson approved on Monday.

Johnson ordered U.S. marshals to serve AET Inc. and AET Offshore Services, the companies hired to transport the crude from the tanker to smaller vessels and bring it to shore, with a copy of the arrest warrant and seize the oil.

Iraq's government is allowed to move the oil, under supervision of U.S. marshals, "to a storage facility for the safekeeping of the cargo," according to the Order to Seize Cargo.

The oil can be released without a court order if the Iraqi government's attorney gives the Marshals Service written proof that all parties agree to its release, the order states.

The Iraqi government is represented by Phillip B. Dye Jr. with Vinson and Elkins of Houston.

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