* Letter threatens suit if Baghdad continues to hamper KRG
* Iraq's Supreme Federal Court blocks injunction attempt
* KRG, Baghdad disagree over meaning of court ruling
By Julia Payne and David Sheppard
LONDON, July 3 Iraq's autonomous Kurdish region
has hit back at Baghdad over independent oil exports, a letter
from the Kurdistan Regional Government (KRG) showed, threatening
to counter sue the central government for trying to block its
The strongly worded letter shows growing confidence from the
Kurdish capital Arbil in the long-running oil sales dispute, as
Baghdad struggles to regain control of swathes of territory lost
to a Sunni Islamic militant insurgency.
The letter, addressed to Iraqi Oil Minister Abdul Karim
Luaibi from KRG Natural Resource Minister Ashti Hawrami, said
the Kurds would pursue legal action by the middle of this month
if Baghdad does not stop its "interference".
"(The) KRG will bring civil, and where necessary, criminal
proceedings against your Ministry and any person, foreign
advisor, or any entity conspiring with your Ministry in any
form," Hawrami wrote, in the letter dated June 29 and carried on
a KRG website. He did not specify a court for the action.
The autonomous Kurdish region has been trying to establish
greater financial independence from Baghdad by selling its own
oil production directly on international markets. It has largely
been spared the violence affecting much of Iraq.
Baghdad has cut the KRG's budget since January over the
dispute, arguing the sales are illegal, and has repeatedly
threatened to sue any firm that buys oil from the autonomous
But since the KRG took control of the northern oil hub of
Kirkuk amid the retreat of the Iraqi military from the Islamic
State-led insurgency, the autonomous region has been emboldened.
On Thursday, the president of Iraq's Kurdish north asked the
region's parliament to prepare the way for a referendum on its
long-saught goal of independence.
In the letter, Hawrami said Baghdad has treated the 2005
Iraqi constitution with "contempt", arguing it was designed to
allow the autonomous Kurdish region to export its own oil.
"These actions of your Ministry are clearly politically
motivated, hostile, illegitimate, and without constitutional
basis, and contrary to the fundamental interests of the people
of Iraq," the letter said.
BAGHDAD SUPREME COURT
The KRG has also been buoyed by a ruling by Iraq's Federal
Supreme Court, which denied Iraq's Oil Ministry request for a
preliminary injunction against the KRG's exports.
Hawrami said this is evidence they are permitted to export
their own oil under the country's 2005 constitution, though
Baghdad has dismissed their interpretation of the Supreme Court
"This Court decision requires you to ensure that your
Ministry immediately desists from any further actions to
directly or indirectly interfere with the KRG's export of crude
oil," Hawrami said in the letter.
Iraq's oil ministry called the KRG's stance on the ruling
"false and misleading" saying in a statement the court made "no
ruling on the substance of the case".
Tensions between the Kurdish regional capital Arbil and
Baghdad have increased since the start-up of a new
KRG-controlled pipeline to the Turkish port of Ceyhan in May.
The autonomous region has been exporting around 125,000
barrels per day to Ceyhan on the line, with plans to shortly
double that number, but so far it has struggled to sell some of
the tankers as potential buyers come under pressure from
Of the four tankers that have loaded the KRG's pipeline oil
since May, only one has successfully delivered into an Israeli
port after executing a ship-to-ship transfer in the
Mediterranean. The buyer has not yet been revealed.
The KRG has denied selling oil to Israel.
(Additional reporting by Dmitry Zhdannikov in London, editing
by William Hardy)