The Iraqi Oil Ministry has officially disqualified Chevron from future contracts after the company signed deals with the KRG.
The prime minister said he will take "all necessary measures" to prevent Exxon's work in Kurdistan, after the White House affirmed its opposition to the deal.
Baghdad leaders are accusing Turkey of abetting an illegal fuel trade with Kurdistan, with potentially dire implications for future relations and investment.
Alleging that the KRG's oil export cutoff has made an $8.5 billion dent in the Iraqi budget, the Cabinet is calling for penalties.
In a bid to expand its oil powers, the KRG is aiming to debunk SOMO's status as the exclusive exporter of Iraqi crude.
The deputy prime minister for energy discusses energy relations with Turkey and Iran, the deadlock with the KRG, and the reasons that IOCs shied away from the fourth bidding round.
The governor of Ninewa province, once an opponent of Exxon's KRG contracts, now says joint oil development could help ease tensions in disputed territories.
The fate of ExxonMobil's West Qurna deal may still be undecided, but no companies who sign contracts in the May 30-31 auction will be allowed to deal with local authorities.
The fate of the company is apparent, despite the controversy, as it carries on with its seven deals in Iraq.
As the divisions between Baghdad and Kurdistan widen, Ashti Hawrami says Kurdistan has the right to sell its oil abroad.
