Exxon Mobil last week is said to have reached a deal with the semiautonomous Kurdistan Regional Government despite strong objections from the central government in Baghdad.
Both governments in Iraq have been unable to settle ongoing legal disputes over oil and natural gas developments in the country.
British envoy to Iraq Michael Aron was quoted by the Guardian newspaper as saying both governments need to settle the score.
"We urge the government in Baghdad with the KRG to resolve their differences and reach agreements over hydrocarbon and revenue sharing," he said.
Tony Hayward, the head of energy company Vallares, said the British envoy's comments reflect broader frustration with the international skirmishes over oil and natural gas laws.
"Everyone is getting rather tired [of the long-drawn out negotiations]," he was quoted as saying. Internal political rivalries have delayed some oil and natural gas developments in Iraq.
But one unidentified expert told the British newspaper that London's diplomatic overtures might be more ominous.
"The British do not want to see American companies such as Exxon running away with the spoils of the north while BP and Shell fear to go there because they do not want to upset Baghdad," the source said.
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