Iraq deputy PM: Turkey driven by greed in Kurd oil row

 Ankara has been "driven by greed" in an escalating row over oil pumped from Iraq's autonomous Kurdish region and shipped overseas via Turkey, Baghdad's top energy official told AFP Sunday.
ussein al-Shahristani, deputy prime minister for energy affairs, also threatened legal action against firms that purchased the "smuggled oil".
His remarks represent a significant ratcheting up of rhetoric after Baghdad filed an arbitration case against Ankara in a widening dispute over Iraq's prized natural resources. Tensions have markedly worsened between the two countries in recent years.
But the shipping of oil extracted from the three-province Kurdistan region last month has further chilled ties both between Baghdad and Ankara, and between the central government and Kurdish authorities in Arbil.
"We believe Turkey has been driven by greed to try to lay (its) hands on cheap Iraqi oil," Shahristani, a former oil minister, said in an interview.
"They have facilitated this smuggling, and obviously this has undermined the relationship" between the countries, he said from his office in Baghdad's heavily fortified Green Zone.
"We had reached a fairly good level of cooperation before Turkey's greed has taken over and allowed itself to help in smuggling Iraqi crude."
- 'A hostile action' -
The dispute between Baghdad and the Kurdish authorities centres around interpretations of Iraq's constitution, with both sides insisting they are behaving legally.
The central government insists it has the sole right to export Iraqi crude and says contracts between Kurdish authorities and foreign energy firms without its expressed consent are illegal, statements Arbil rejects.
The two sides are also at loggerheads over disputed oil-rich territory in northern Iraq, with diplomats and analysts warning the issues are collectively among the biggest long-term threats to Iraq's stability.
But the row took on a new dimension when Turkey announced last month that oil pumped from Kurdistan had been shipped to international markets, escalating a simmering dispute between Iraq and both Ankara and Arbil.
Iraq responded by filing an arbitration request, asking the Paris-based International Chamber of Commerce to order Turkey and its state-owned pipeline company to "cease all unauthorised transport, storage and loading of crude oil," and added it was seeking financial damages of more than $250 million (180 million euros).
"Turkish action has been extremely harmful to Iraq," Shahristani said. "It has undermined the economy, it has deprived the Iraqi people of revenues."
"This is a hostile action that no other neighbour has taken against Iraq."
He urged the "Turkish government to reconsider that position because of its potential damage of our bilateral relationship."
- 'Smuggled oil' -
Ties between Iraq and Turkey, which had been on the up as recently as 2010, have since dramatically worsened with the ICC case likely to damage efforts to improve them.
The two countries differ over the Syrian conflict as well as Turkey's dealings with Iraq's Kurdistan region.
Diplomats say the countries' leaders also have strained personal relations.
Shahristani warned of legal action against any companies that purchased oil pumped in Kurdistan and shipped without Baghdad's consent, noting Iraq had hired law firms in Europe to chase down potential buyers.
"We have warned all the buyers ... of the serious consequences that they will have to bear if they deal with smuggled oil from Iraq," he said.
"Legal action will be taken against the companies that will buy the oil."
Washington has warned the oil shipments could further destabilise Iraq, which is already grappling with a year-long surge in bloodshed and what is expected to be a protracted period of government formation following April 30 elections.
The US does not "support exports without the appropriate approval of the federal Iraqi government, and certainly we do have concerns about the impact of those continuing," State Department spokeswoman Jen Psaki said.
Iraq's oil ministry announced on Sunday that crude exports in May rose for a second month to 2.58 million barrels per day, with Shahristani saying he expected average daily sales to rise to three million bpd by the end of the year.