French energy giant Total said it had signed an oil exploration deal in the Kurdistan region in Iraq's north, a move likely to put it at odds with the central government in Baghdad.
" Total has completed an acquisition of 35 percent interest in two blocks, Harir and Safen, held by Marathon Oil," a US company, Total said in a statement.
The move came a week after Iraq barred US energy giant Chevron from working in non-Kurdish parts of the country after it bought two exploration blocks in the autonomous Kurdish region against Baghdad's wishes.
Baghdad regards any contracts signed by Kurdistan which are not approved by the central government's oil ministry as invalid.
Iraqi Deputy Prime Minister for energy affairs Hussein al-Shahristani in April warned Total that any deal the French firm signs with Iraq's autonomous Kurdish region would be illegal.
Total is part of a consortium along with China's CNPC and the Malaysian group 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.
Baghdad awarded the contract in December 2009.
The spat over oil contracts is one of several between the central government in Baghdad and Kurdish authorities in Arbil.