Baghdad is preparing to sue Genel Energy, the oil company run by the former BP chief executive Tony Hayward, for "illegally" exporting some of the oil it produced in the semi-autonomous region of Kurdistan.
Last week the Kurdistan regional government gave Genel permission to truck oil exports directly to Turkey, which it did, making it the first company to export oil directly from the region. Kurdistan's oil exports have traditionally gone through Baghdad.
But Iraq's oil minister, Abdul Kareem Luaibi, has retaliated, saying that Baghdad intends to sue Genel for the exports. Genel Energy was created in 2011 when Turkey's Genel was reversed into a cash shell put together by Nat Rothschild.