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EXCLUSIVE-LyondellBasell seen as mystery U.S. buyer of Kurdish oil in May
July 30, 2014 / 11:03 PM / in 3 years

EXCLUSIVE-LyondellBasell seen as mystery U.S. buyer of Kurdish oil in May

NEW YORK, July 30 (Reuters) - Chemicals firm LyondellBasell , owned by Ukraine-born billionaire Leonard Blavatnik, appears to be the mystery American buyer of two cargoes of Kurdish crude delivered in May, according to U.S. government data and industry sources.

Nearly two months prior to this week’s standoff between the central government of Iraq and Kurdistan over a tanker near Texas with $100 million of Kurdish crude, a smaller ship with Kurdish oil discharged its cargo of heavy, sour Shaikan crude in Houston without any legal tangles, Reuters had reported. A second ship arrived later in May, data show.

The ultimate buyer of those cargoes had remained a mystery - until now.

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.

LyondellBasell did not respond to emails and phone messages from Reuters asking if it had contracted to buy Kurdish oil. A spokesman for Blavatnik’s global conglomerate Access Industries, which has a stake in Lyondell, did not comment. 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.

The data highlight the difficulty Baghdad has had in blocking Kurdistan’s ability to sell its crude as its leaders push for greater political and economic autonomy.

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.

For the most part, however, Baghdad 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 over two years, including refineries in Italy, Germany, the Netherlands, France, Israel and Brazil.

But Baghdad has shown new legal vigilance toward large-scale tanker sales that began this summer, causing buyers to balk. This week it filed a lawsuit in Texas to try to gain control of 1 million barrels of Kurdish crude on the United Kalavrvta tanker anchored in the Gulf of Mexico.

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 Kurdistan.

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 Washington.

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 Lisa Shumaker)

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