July 4, 2017 / 8:06 PM / in a month

Canada orders seizure of oil tanker carrying crude from Iraqi Kurdistan

CALGARY, Alberta (Reuters) - The Federal Court of Canada has ordered the seizure of a 721,915-barrel cargo of crude from Kurdistan aboard the "Neverland" oil tanker on the request of the Iraq Oil Ministry, court documents show.

The Iraq Oil Ministry has also filed a claim against commodity trading house Vitol S.A. and subsidiaries including Mansel Ltd, the charterer of the ship, and affiliate Finaval SpA di Navigazione, the owner of the ship, for $32.5 million.

Iraq claims the cargo was unlawfully misappropriated by the Kurdistan Regional Government and sold to Vitol to be loaded onto the "Neverland." Vitol declined to comment.

The court action, dated June 29, is the latest step in a long-running battle between the federal government in Iraq and the Kurdistan Regional Government over who has the right to export and market crude from the semi-autonomous region.

The "Neverland" loaded in Ceyhan in Turkey, according to the court documents and Reuters shipping data last showed it off the coast of Nova Scotia in the western North Atlantic. It was not immediately clear where the cargo was headed.

Last week Kurdistan's natural resources minister told Reuters its crude buyers had said they were not taking crude to the United States to avoid upsetting the central government in Baghdad.

In its claim the Iraq Oil Ministry said it had advised Vitol before it bought the cargo that any purchase of crude from the Kurdistan Regional Government would violate the rights of the people of Iraq.

Vitol went ahead and bought and loaded the crude anyway, and has refused demands to discharge the cargo into the control of the Iraq Oil Ministry, the court documents allege.

The documents were signed and dated in Halifax, Nova Scotia, and Iraq is asking the case be tried there.

Additional reporting by Dmitry Zhdannikov in London; Editing by Lisa Shumaker

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