BAGHDAD, (Reuters) – Iraq has decided to blacklist Chevron Corp and bar it from signing any oil deals with the oil ministry after the U.S. major purchased stakes in two blocks in Iraq’s Kurdistan, the oil ministry said in a statement on Tuesday.

“In line with Oil Ministry policy based on the constitution, the Oil Ministry announces the disqualification of Chevron company and bars it from signing any deals with the federal Oil Ministry and its companies,” the statement said.

Chevron Corp confirmed last week its purchase of 80 percent of two blocks in Iraq’s Kurdistan, as the second-largest U.S. oil company follows Exxon Mobil Corp into an area where oil rights are a subject of fierce dispute.

Chevron is purchasing the Sarta and Rovi blocks from India’s Reliance Industries Ltd, where it will be the new partner of Austria’s OMV AG – holder of the other 20 percent interest.

Baghdad has a long-running dispute with Kurdistan regional government over oil, lands and sharing revenues and insists that it has the sole authority to manage oil fields and sign deals in the north.

“The reputation and credibility of Chevron and other companies are being tested today and we are fully confident the result of its test is a total failure and it should feel ashamed of its action,” the statement said.