The regional government charged that the warning issued by Oil Minister Hussein Shahristani last Thurday was reminiscent of the Arab chauvinism of Saddam Hussein's regime.

"We thought that the era of threats against the Kurds in Iraq was over. It is disappointing to see that Dr Shahristani has chosen to side with the anti-Kurdish elements from the Saddam era," the regional government said.

It said the deals it had signed with foreign oil firms were "constitutional and legal within the framework of the Kurdistan Oil and Gas Law, the only existing framework regulating our oil industry in the post-Saddam era."

The regional government has signed 15 such contracts with 20 international companies since it passed its own oil law in August.

It says the contracts stipulate that 85 percent of the returns from these deals would be for Iraq and the rest would go to the contractor.

"We are not deterred by Dr Shahristani's views. Experience shows that most international oil companies now ignore his unhelpful interventions," the statement said.

"Once again our message to the international oil companies and potential investors is... empty threats and talk of blackmail will not last. We are sure that eventually common sense will prevail in dealing with these matters."

Shahristani warned oil firms to stop entering into contracts with the regional government in Arbil as the national parliament in Baghdad has yet to approve a new oil and gas law.

"We warned the companies that there will be consequences... that Iraq will not allow its oil to be exported," Shahristani told reporters on the sidelines of OPEC meetings in the Saudi capital Riyadh.

"Our position is that any company that signs a contract without the approval of the federal authority will compromise their chances of getting business in future in Iraq."

The oil and gas bill is stalled in parliament amid bitter differences between rival factions.

When approved, the new law will open up Iraq's long state-dominated oil and gas sector to foreign investment.

It will also stipulate that receipts be shared equally between Iraq's 18 provinces, a key concern for the Sunni Arab minority that Washington says has fuelled the insurgency.

Iraq's oil reserves -- the world's third largest -- lie in the Kurdish north and Shiite south and the Sunnis fear the two communities could monopolise future income.