Kurds cannot Sell Oil in U.S.

US Court Upholds Iraq on Technicality

• Court says Kurdish crude oil cargo discharged in Israel

• Companies like DNO, Genel Energy have been caught in dispute

Iraq’s self-ruled Kurds can’t sell Iraqi crude oil in the U.S. under a court decision that puts a fresh hurdle in the path of Kurdish efforts to achieve financial independence from the central government in Baghdad.

The U.S. Court of Appeals for the Fifth Circuit in New Orleans dismissed an attempt by the Kurdistan Regional Government to overturn a judge’s earlier decision against its planned sale of oil to an unidentified buyer in the U.S. The KRG’s eventual sale of the disputed cargo in Israel made the appeal moot, the court said in a ruling.

The case began last year when Iraq’s central government sued to seize a tanker loaded with crude from the country’s Kurdish region that had sailed to the Gulf of Mexico and anchored 60 miles (97 kilometers) off the coast of Texas. The appeals court upheld an order by a judge in Houston requiring the KRG to notify him before trying in the future to sell any oil in the U.S.

“The KRG mooted this appeal through its voluntary decision to discharge the cargo in Israel,” the court said Monday in its 13-page ruling. “In so doing, the KRG severely weakened its argument.”

Resisting Control

Iraq’s minority Kurds, who historically have resisted control by governments in Baghdad, are independently developing oil reserves they say may total 45 billion barrels – equivalent to almost a third of Iraq’s total deposits, according to BP Plc data. When the KRG sought to export oil on its own last year, the central government waged a legal battle to stop Kurdish cargoes from unloading, including the tanker that reached the Texas coast.

Oil companies including DNO ASA and Genel Energy Plc that operate in the Kurdish region have been caught up in the dispute over revenue from crude sales between the KRG and the central government.