Baghdad seeks to have Kurdish oil dispute settled in Iraq

HOUSTON Fri Aug 1, 2014 6:13pm EDT

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HOUSTON Aug 1 (Reuters) - Baghdad wants to settle a high-stakes dispute over $100 million worth of Kurdish crude oil in Iraq's courts, although the oil is sitting in a tanker off the coast of Texas, a U.S. court filing said on Friday.

Iraq's central government has also asked Iraq's Federal Supreme Court to block the Kurdistan Regional Government from exporting any crude until its ownership can be determined, said the filing in federal court in Houston. The central government contends it belongs to the country as a whole, not just the Kurdistan region.

The latest legal challenge follows Iraq in May bringing criminal charges against the Kurdistan government, alleging theft of oil revenues. However, Kurdistan has failed to appear in court to address the charges, the filing said.

Iraqi Kurdistans "failure to comply with the summonses has effectively blocked the Federal Supreme Court from hearing the merits of the case," the filing said.

Harold Watson, a Houston lawyer representing Kurdistan, did not have an immediate comment on the filing.

On Tuesday, U.S. Magistrate Nancy Johnson told lawyers for Iraq that the dispute should be resolved in Iraq anyway. She had issued an order to seize the cargo, but the tanker was some 60 miles (100 km) offshore, which is about 50 miles outside of federal jurisdiction.

Kurdistan is trying to boost its finances through bulk oil sales. But LyondellBasell, the main U.S. customer for the cargo that landed the issue in Houston federal court, said this week that it would not take it or any further shipments until the matter is resolved. (Reporting by Anna Driver, Kristen Hays and Marianna Parraga; Editing by Lisa Shumaker)

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