"Yes, we will recognise them," Luaybi told Dow Jones Newswires at a meeting in Cairo of the Organisation of Arab Petroleum Exporting Countries.

Luaybi, whose appointment to Prime Minister Nuri al-Maliki's new cabinet was approved by parliament on Tuesday, said the central government would also reimburse costs incurred by international companies investing in the region.

The minister said on Friday that the Iraqi government would activate an agreement signed with Kurdistan earlier this year to export crude oil, according to the report.

"We have already signed an agreement with Kurdistan... God willing this agreement will be activated within a few days," he was quoted as telling reporters in Cairo.

The Kurdish regional government of northern Iraq says it has signed 37 contracts with 40 companies, amounting to an investment of 10 billion dollars when completed, for oil exploration and production since 2004.

Baghdad has long been in dispute with the government of Iraq's autonomous northern region over the contracts with foreign firms.

The central government has said the deals are not binding as they have not been approved by Baghdad, while the Kurdistan government says they are in line with the constitution.

The issue was discussed in the months-long wrangling which led to the formation of a new Iraqi government, after the Kurdish parties refused to sign up unless their region's contracts were approved by Baghdad.

Iraqi Kurdistan started exporting oil for the first time on June 1, 2009 despite protests from Baghdad. The exports were suspended in October of the same year in a dispute over payments.

- Dow Jones Newswires contributed to this report -

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