Iraq's autonomous Kurdistan region must decide whether it wishes to remain part of the country or form its own independent state, Baghdad's oil minister said in an interview published Friday.

Abdelkarim al-Luaybi's strong comments come as Iraq aims to ramp up oil production despite not having passed a hydrocarbons law to regulate the distribution of lucrative revenues from crude sales.

"It's up to the Kurdistan region to decide whether it has made a strategic decision to stay part of Iraq or it has made up its mind to establish its independent state," Luaybi told the iraqoilforum.com website run by energy analyst Ruba Husari.

"It is not acceptable ... that the Kurds sign contracts that award every single inch of the Kurdistan region of Iraq, without the participation of the inhabitants of the 15 other provinces in the decision," he said.

The Kurdistan region has signed around 40 contracts with foreign energy firms on a production-sharing basis without seeking the express approval of the central government's oil ministry.

The federal oil ministry, meanwhile, has instead awarded energy contracts to international companies on the basis of a per-barrel service fee. It has also refused to sign deals with any firm that has agreed a contract with Kurdistan.

That refusal was put in the spotlight in October, when Kurdistan inked a deal with ExxonMobil to explore six areas of the region. The US firm had previously signed a contract with Baghdad to ramp up production at the West Qurna-1 field, Iraq's second-biggest.

Iraq has said the oil giant must choose between the two contracts, a demand Luaybi reiterated in the iraqoilforum.com interview.

"They have to choose either to continue work here, which we have no issue with, or to work in the Kurdistan region," he said.

He added: "They are required to decide on a final position. Our position is clear. No company, whether Exxon or any other, would be allowed to breach our constitution and current laws and directives."

"If it decides to pull out, it will be the biggest loser. The entire Kurdistan region oil is nothing compared to WQ (West-Qurna) oil field."

Iraq's draft 2012 budget estimates oil exports of 2.6 million barrels per day (bpd), including 175,000 bpd from the Kurdistan region. The region receives a 17 percent share of the national budget, as part of a deal with Baghdad.