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Published: Friday January 17, 2014 MYT 10:40:06 PM
Updated: Friday January 17, 2014 MYT 10:40:06 PM

Iraq to punish Turkey, Kurds over 'smuggled' oil - minister

BAGHDAD (Reuters) - Iraq will take legal and other measures to punish Turkey and Iraqi Kurdistan, as well as foreign companies, for any involvement in Kurdish exports of "smuggled" oil without Baghdad's consent, the oil minister said on Friday.

Abdul Kareem Luaibi told reporters the government was preparing legal action against Ankara and would blacklist any companies dealing with oil piped to Turkey from Iraq's autonomous northern region without permission from Baghdad.

The Kurdistan Regional Government said last week that crude had begun to flow through the pipeline, and exports were on track to start at the end of January, inviting bidders to register with the Kurdistan Oil Marketing Organisation.

Luaibi said it was not in Turkey's interest to jeopardise bilateral trade worth $12 billion (7.2 billion pounds) a year, saying Baghdad would consider boycotting all Turkish companies and cancelling contracts with Turkish firms if the oil exports went ahead.

He also said the Finance Ministry had been told to calculate how much should be deducted from Iraqi Kurdistan's 17 percent share of the federal budget if the region failed to meet a government-set export target for this year of 400,000 barrels per day via the State Oil Marketing Organisation.

Preparations were under way, Luaibi said, "to raise a lawsuit against the Turkish government for allowing Kurdistan to pump oil through the export pipeline without the approval of the Iraqi central government, which represents ... a clear violation of the agreement signed between the two countries ... governing the export of Iraqi oil through Turkey".

(Reporting by Ahmed Rasheed; Writing by Alistair Lyon; Editing by Dale Hudson)

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