Michael Howard, a communications adviser to the Kurdistan authorities, said ExxonMobil signed exploration deals on six blocks in the region of northern Iraq, the first major international oil company to do so.

The deal posed a new challenge to Baghdad's authority from the largely ethnic-Kurd region, with Iraq's central government opposed to regions setting their own oil exploration contracts.

ExxonMobil would not comment on the agreement when contacted by AFP.

But an oil ministry official suggested the US oil giant could lose its current contract for the already-producing West Qurna field if it goes ahead in Kurdistan.

"Exxon should choose between either continuing with its deal with the Kurdistan Regional Government or lose its contract in southern Iraq," Abdul Mahdi al-Ameedi, head of petroleum contracts and licensing directorate at Iraq's Oil Ministry, told Dow Jones Newswires.