(Adds details, background)
By Jonathan Leff and Terry Wade
NEW YORK/HOUSTON, July 31 Chemicals firm
LyondellBasell, owned by Ukraine-born billionaire
Leonard Blavatnik, has emerged as the mystery American buyer of
Kurdish crude oil this year, but said on Thursday it will not be
buying any more due to an ownership dispute.
Following a Reuters report 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 told Reuters that the firm had recently purchased
"modest quantities of Iraqi crudes".
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."
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, idle now 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 LyondellBasel, 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
The decision to swear off further imports is a win to
Baghdad, which has stepped up efforts to discourage refiners
across the globe from buying crude oil piped out of Kurdistan.
Both Iraq's oil marketers and the U.S. government have
warned those who do business with the Kurdish government,
including oil sales, that they risk legal action from Baghdad.
The long-running dispute has 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.
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.
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 -
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 past 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
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 formerly banned purchases of
Kurdish crude oil, 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
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)