(Adds statement on Blavatnik not being involved in daily operations)
NEW YORK/HOUSTON, July 31 (Reuters) - Chemicals firm LyondellBasell, part of Ukrainian-born billionaire Leonard Blavatnik's business empire, said it will quit buying "disputed" oil from Iraq - one day after Reuters identified it as the mystery American importer of Kurdish crude.
Following a Reuters report on Wednesday that, for the first time, identified the company's Houston Refining LP unit as having imported two small cargoes of heavy, sour Kurdish crude in May, LyondellBasel confirmed that the company had recently purchased "modest quantities" of what it called "Iraqi crudes".
It was not immediately clear if the company had also agreed to buy a cargo of some 1 million barrels worth $100 million that is currently on the tanker United Kalavrvta off the coast of Texas. That cargo, now idle for several days, is at the center of a legal dispute between the central government of Iraq and the Kurdistan Regional Government over who owns it.
The statement from LyondellBasell, its first public comment on the imports, did not refer to any specific shipments and did not refer directly to Kurdistan.
"This Iraqi crude is apparently now the subject of an ownership dispute," the company said. A spokesman was not immediately available to clarify what this referred to, or whether the earlier smaller shipments were in dispute.
"We have canceled further purchases and will not accept delivery of any of the affected crude until the matter is appropriately resolved."
The decision to swear off further imports is a win for Baghdad, which has stepped up efforts to discourage refiners across the globe from buying crude oil piped out of Kurdistan.
Iraq's oil marketers and the U.S. government have both warned those who do business with the Kurdish government, including oil sales, that they risk legal action from Baghdad.
The long-running dispute gained global attention this week after Baghdad filed a lawsuit in Texas to try to gain control of the United Kalavrvta's oil. U.S. Marshalls have been unable to carry out an order to seize the cargo because the tanker is outside of U.S. waters.
Lyondell said its Iraqi oil purchases were made "from a reputable international trader with a guarantee of title and in compliance with U.S. law."
The company said Blavatnik, whose Access Industries conglomerate owns over 17 percent of the firm, according to ThomsonReuters Data, has no knowledge of its daily operations.
Blavatnik, a U.S. citizen who was born in Odessa to Russian-speaking parents, is now the world's 33rd richest man after selling his stake in TNK-BP to Russian oil giant Rosneft, according to Forbes.
Lyondell's shares fell 1.7 percent in New York.
TRUCKS OKAY, PIPES NOT
While Baghdad has shown new legal vigilance toward large-scale tanker sales that began this summer, it has done little to discourage Kurdistan from selling piecemeal shipments hauled to Turkey via truck. In total, almost 20 million barrels of combined Kurdish crude oil and condensate has been sold to international customers since 2012, including companies in Italy, Germany, the Netherlands, France, Israel and Brazil.
Two months ago, two small cargoes of heavy, sour Shaikan crude arrived in Houston without any legal tangles in May, Reuters has previously reported.
The ultimate buyer of those cargoes had remained a mystery - until now.
According to data from the U.S. Energy Information Administration released on Wednesday, Houston Refining LP, owned by LyondellBasell, imported two cargoes of what was labeled Iraqi crude that match the size of the May shipments and had the distinct quality specifications of Kurdish Shaikan.
The data show two shipments of 266,000 and 267,000 barrels of crude oil, both with 4.6 percent sulfur content, far higher than typical Iraqi imports but in line with the Kurdish Shaikan variety, according to market sources familiar with the oil.
The Houston Refining imports were also significantly more dense, or heavier, than standard Iraqi crude, with API ratings of 16.7 and 21.4, similar to Kurdish Shaikan, the data show. Almost all Iraqi crude imported since 2012 has been lighter, at 28 API or more.
The State Department said it has no information on who bought the May cargoes.
OPPOSITION TO KURDISH SALES
Only a few times in the last two and a half years has the United States imported Iraqi crude with characteristics similar to the cargoes that arrived in May, the EIA data show.
One of those was imported by Houston Refining in November 2012 - the same year that Kurdistan first began selling oil independently of the central government in Baghdad. It was not immediately clear whether this shipment also originated from Kurdistan.
Another shipment with the characteristics of Kurdish oil arrived at Marathon Petroleum Corp's Galveston Bay refinery in April 2013. It was 19.3 API with sulfur at 3.84 percent. Marathon declined to comment.
The United States has not banned purchases of Kurdish crude oil in the past, but in recent months it has pressured companies - both at home and abroad - not to buy Iraqi crude from outside Baghdad's central oil sales system.
Still, a number of major U.S. companies, including ExxonMobil Corp, Chevron Corp, Marathon Oil Corp , and Hess Corp are operating in Iraqi Kurdistan, despite objections from Baghdad and occasional disquiet in Washington.
Baghdad has increased opposition to Kurdish sales since the launch of the Kurdistan Regional Government's own pipeline to Turkey in January that could bring the Kurds greater revenues. (Reporting by Jonathan Leff; Additional reporting by Timothy Gardner in Washington; Erwin Seba, Marianna Parraga and Terry Wade in Houston; Julia Payne and David Sheppard in London; Editing by Marguerita Choy and Gunna Dickson)