Iraq is expected to put around a dozen oil and natural gas blocks up for auction in its fourth licensing round, scheduled for May. Exxon Mobil is prohibited from taking part because it has contracts with the semiautonomous Kurdistan Regional Government.
"The Iraqi government has decided that Exxon won't be allowed to participate in the next oil- and gas-bidding round," Faisal Abdullah, a spokesman for the Iraqi Oil Ministry, told The Wall Street Journal.
The Kurdish government signed dozens of oil and natural gas deals with international oil companies. The KRG had hoped its deals with Exxon would convince other major oil companies to follow suit, the Journal notes.
Baghdad maintains any unilateral deals signed between the KRG and energy companies violate federal laws. Some lawmakers said the central government doesn't have the right to block companies like Exxon from auctions because of their work with the KRG, however.
Iraq has around 143 billion barrels of oil reserves. It ranks fourth among members of the Organization of Petroleum Exporting Countries.