UPDATE 2-Iraq threatens legal action against any buyer of piped Kurdish oil

Sun Jun 1, 2014 8:50am EDT

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ARBIL, Iraq, June 1 (Reuters) - Iraq threatened on Sunday to take legal action against any buyer of oil exported via a new pipeline from the autonomous Kurdistan region to Turkey, while the destination of the first cargo was still unclear.

The cargo of Kurdish oil left Turkish shores 10 days ago aboard the United Leadership tanker, prompting Baghdad to file for international arbitration against Ankara for facilitating the sale.

Iraq says its State Oil Marketing Organisation (SOMO) has exclusive rights to manage sales of crude from all the country, including Kurdistan, and considers unilateral exports from the region as "smuggling".

The tanker's destination is still unclear, but it has become a symbol of a long-running and intractable dispute between Baghdad and the Kurdish region over resource rights and revenue sharing.

"SOMO, on behalf of the Iraqi federal ministry of oil, is hereby warning all companies, individuals and bodies from buying the Iraqi crude oil cargo that is loaded on the vessel," SOMO said in a statement signed by General Director Majid Alhilfi.

"The Iraqi federal ministry of oil and SOMO ... shall reserve the right to take all legal measures against any company, individual and/or body that bought or might consider buying the said cargo," it added.

After leaving Turkey's Ceyhan port, the United Leadership sailed through the Mediterranean and appeared to be heading in the direction of the United States, but on Friday reversed course, ship tracking data showed.

On Sunday it appeared to be stationary in waters off the coast of Morocco.

Until last week, Kurdish oil exports were limited to a small volume trucked to two Turkish ports on the Mediterranean. SOMO also made threats of legal action regarding those shipments, but they have so far come to nothing. (Reporting by Isabel Coles; editing by Jane Baird)

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