French energy giant Total must end its dealings with the autonomous Kurdish region in northern Iraq or sell its stake in a major southern oilfield, Iraq's top energy official told AFP on Sunday.
Total "was requested to withdraw from this field, and it has been given a certain period to end this case by selling its share to another company or by ending the contract with Kurdistan," said Hussein al-Shahristani, the deputy premier responsible for energy affairs.
He did not specify the time by which Total needed to make a decision.
Kurdish authorities have signed dozens of deals with foreign energy firms on a production-sharing basis, contracts regarded as illegal by Baghdad which prefers per-barrel service fees.
Total said on July 31 that it had signed an oil exploration deal with the Kurdish region, putting it on a collision course with the central government.
The agreement came with relations between the autonomous region and Baghdad at a low ebb over multiple festering disputes, including over oil contracts and territorial claims.