ERBIL, Kurdistan Region – An oil tanker carrying crude oil from the Kurdistan Region that went off track and was allegedly heading to the US over a week ago has reappeared in waters near the east coast of Canada and the US.
The Italian-flagged Neverland departed the Turkish port city of Ceyhan on June 13 with more than 700,000 b/d, destined for Augusta, Italy, but it turned off its transponder on June 21 just past the Strait of Gibraltar, heading toward the Atlantic Ocean as reported by UK-based S&P Global Platts.
Although oil traders haven't been able to locate the tanker using AIS ship tracking technology since the ship turned off its transponder over a week ago, AIS detected the ship’s location on Friday at approximately 300 miles off the Canadian coastal city of Halifax and approximately 600 miles off of the US coastal city of Boston as reported by The Financial Times.
Kurdistan's Minister of Natural Resources told Reuters Thursday that the Kurdish crude oil is not heading to the United States.
"I have made inquiries with our crude buyers and was assured that no cargo with crude is going to the United States," Hawrami said.
Hawrami stated that the KRG sells its crude oil on a “free-on-board” basis and is not directly involved with the final buyers of their product.
Once the Neverland turned off its transponder and appeared to be heading for the Atlantic Ocean, Iraqi’s Oil ministry warned the KRG against legal action if KRG’s oil exports reached American soil.
“A senior Iraqi Oil Ministry official told S&P Global Platts that the ministry has been authorized to challenge the legality of the shipment and any other tankers, marking increased tension following recent warming between Baghdad and Erbil,” S&P Global Platts reported in a statement on Tuesday.
"We don't have any intention of upsetting Baghdad. Our policy is to discuss and solve problems and not to create new obstacles," Hawrami said. He also added that there were ongoing discussions between Erbil and Baghdad regarding oil production, exports, refining and power generation.
A number of large independent traders handle the sale of Kurdish oil exports including Vitol, Trafigura, Glencore and Petraco, FT said.
A specialist trade publication, The Iraq Oil Report said on Friday that Baghdad is preparing to take legal action in Canada, stating they believed it was the world’s largest independent oil trader, Vitol, in charge of the shipment.
The Kurdistan Region has been developing its oil and gas sector for a more robust source of income especially after the Iraqi government of former PM Nouri al-Maliki cut the Region’s budget in 2014.
The Financial Times also reported on Friday that the Russian state-run oil firm Rosneft has entered talks with the Kurdish region to develop oil wells in the disputed areas, claimed both by Erbil and Baghdad, including Bai Hassan oil field in the oil-rich Kirkuk. The Russian firm signed a provisional agreement with the Kurdistan Region earlier in June to further exploration and marketing.
Rosneft declined to comment on the exact location of the fields under discussion, but did not deny it was considering working in territories whose ownership was disputed, the FT said.
Asked whether the blocks Rosneft may invest in could be located in the disputed areas, Kurdish Prime Minister Nechirvan Barzani said on June 6 that disputed areas no longer existed. He also said that Rosneft had chosen five blocks, but did not provide details about the locations, not ruling out the disputed areas, also called by the Kurdish government as the Kurdistani areas.
“We no longer have disputed areas," Barzani said then. "It has been a long time since these areas were liberated. And of course these areas have never been disputed areas. They are the Kurdistan Region and have been liberated by the blood of the martyrs and the Peshmerga. Any talk on this issue should not be like it used to be some years ago. I believe that Baghdad also understands this,” he said. “This has gone from our dictionary.”
The Turkish port of Ceyhan is a major outlet for Kurdish oil to the world market.
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