A worker adjusts the valve of an oil pipe at West Qurna oilfield in Iraq's southern province of Basra November 28, 2010
US crude oil prices fell in a volatile trading session on Friday. Volumes were light and the sell-off in risky assets over the later part of trade saw oil prices erode early gains. Reuters

Iraqi Prime Minister Nuri al-Maliki said U.S. oil company Exxon Mobil Corp. is reconsidering the contracts it made with Kurdistan. The contracts have drawn ire from Iraqi officials who view the move as an affront to their authority.

Speaking to Agence France Presse on Thursday, Maliki said his government had a meeting with ExxonMobil in Washington, D.C., at which point the contracts were discussed and said to be in disputed areas.

They promised to reconsider their decision, Maliki told AFP.

While Iraq's licensing director Abdul Mahdy Al Ameedi suggested his government will uphold its contract with ExxonMobil, officials are considering measures, reported Bloomberg Wednesday. ExxonMobil could be excluded from the country's next round of licensing, according to The Asia Times, which cited a report from the Kurdistan News Agency.

ExxonMobil and the Iraqi central government have been at odds with each other since November, after the U.S. oil company signed contracts for several exploration rights in the semi-autonomous region of the country. Iraqi government officials consider the contracts illegal if they are not made with the blessing of Baghdad.

Since ExxonMobil signed its Kurdish contracts, Iraq has threatened to revoke the company's previous deal with Baghdad to develop the Qurna oil field to the south of the country. An estimated nine billion barrels of oil is said to be in the region, and Thursday's announcement is the first time ExxonMobil, which has remained quiet on the issue, is suggesting a change of course.

ExxonMobil spokesman Patrick McGinn said the company had no comment.