The deputy premier for energy affairs on Wednesday warned French companies that any contracts with Baghdad would be scrapped if they signed deals with local or regional governments in Iraq.
The autonomous Kurdistan region in north Iraq has signed a number of oil contracts with foreign firms, but the federal government considers them illegal and insists all such deals must go through Baghdad.
Hussein al-Shahristani “warned French companies working in the oil sector in Iraq against signing contracts with (entities) other than the Iraqi government,” during a meeting with French ambassador Denis Gauer, the deputy premier's office said.
Shahristani asked Gauer to convey to the French government that if any French firm signs “a contract with the Kurdistan region or another local government without the approval of the federal government, this will mean the end of its contracts in Iraq,” his spokesman Faisal Abdullah told AFP.
Shahristani had previously said that French oil giant Total would “be considered in breach of Iraqi laws” if it signed any deals without the approval of the Baghdad government.
Total chief executive Christophe de Margerie said earlier this year that his firm was in talks over potential deals with the three-province Kurdistan region.
Total is part of a consortium along with China’s CNPC and Malaysia’s Petronas seeking to ramp up output at the Halfaya field in Iraq's southern Maysan province, which has proven reserves of about 4.1 billion barrels.
Shahristani’s remarks on Wednesday come a day after Prime Minister Nuri al-Maliki’s spokesman, Ali Mussawi, said the premier believes a contract between US oil giant ExxonMobil and the Kurdistan region is dangerous and could lead to “breaking up the unity of Iraq.”
Maliki last week requested that U.S. President Barack Obama intervene to block the Exxon deal, which the company signed with Kurdistan in October, Mussawi said.
Iraqi Kurdistan has been locked in a standoff with Baghdad for months, one of a series of intertwined political crises which have escalated into calls for Maliki to be removed from power.