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Last September Hunt Oil Co signed a contract with the Kurds and that had angered Iraq's central government in Baghdad. The central government said that any deals with foreign companies should not be signed until lawmakers agreed on how the nation's oil revenues would be divided. The issue still remains unresolved and it continues to be among the most contentious within the Iraqi Parliament.

Sean McCormack is a state department spokesman and he told reporters that the department advised all U.S. oil companies against making any deals in Iraq before the hydrocarbons law passed because it would aggravate political tensions. Hunt oil co. was also told not to make any deals.

McCormack said that if individuals encouraged the deal than their actions would have been contrary to official administration policy.

"We advised anybody who came to us that absent a hydrocarbons law they should defer signature of any contracts with any sub-regional institutions in Iraq,"

McCormack said. He also said that the policy was conveyed.

The House Oversight and Government Affairs Committee, led by Rep. Henry Waxman, D-Calif., says there is no evidence that the administration tried to dissuade the company, which is based in Dallas Texas. Further, the committee's review of e-mail messages and other documents show that in some cases, the state department and other administration officials seemed to encourage the deal.

A state department regional coordinator wrote in an email that he was happy to hear of Hunt oil's efforts. The official also said that getting an American company to sign a deal with the Kurds would make big news in the states.

Another state department official that was stationed in Iraq contacted Hunt Oil and told them about a second business opportunity and he offered to give additional information if they wanted it.

At the time the messages would have ran counter to public statements made by state department officials in Washington. Tom Casey, a State Department spokesman, told reporters back in September that the administration saw the deal as unhelpful. In October Jeffery Bergner, The department's chief liaison to Congress, told lawmakers that Hunt Oil was warned that such contracts would needlessly elevate tensions between the Kurds and Iraq's central government.

Hunt Oil was told by U.S. officials in Iraq that the U.S. had no policy on the contracts, according to notes that were taken by Hunt Oil at a June 2007 meeting with U.S. officials in Iraq.