Iraq's Oil Minister announced on Monday that Exxon Mobil (NYSE:XOM), the biggest U.S. oil company, has confirmed its intention to freeze a controversial deal with the Kurdish government.

Abdul Kareem Luaibi said the company sent him a second letter reinforcing statements it made last month, according to Reuters. The decision may lead the Iraqi government to allow Exxon Mobil to bid again for exploration contracts, after being excluded in retaliation for its agreement with the Kurdish authorities.

In November of last year, Kurdish officials announced they successfully negotiated exploration and development contracts with the oil company. Kurdistan, an autonomous oil-rich region in the north of Iraq, is at odds with the central government over oil rights and revenue distribution. Baghdad does not recognize exploration contracts made without its approval.

The announcement at the time brought the ire of Iraqi ministers who threatened to revoke Exxon Mobil's contracts in the country's south, where it is the lead company developing parts of West Qurna, of the country's biggest oil fields.

Iraq is said to have 115 billion barrels of oil yet to be discovered. Kurdistan has an estimated 2 billion barrels in proven reserves, according to the Energy Information Administration.

On Feb. 27, after months of silence, Exxon Mobil confirmed a deal was struck with Kurdish authorities. On March 16, the company announced it was freezing its deal in Kurdistan.

Iraqi officials previously removed Exxon Mobil from the country's latest lease sale. It is still unclear if Baghdad's decision will be reversed after the company's announcement.

In Monday trading on Wall Street, Exxon Mobil was up 29 cents to $87.03.