Iraq has approved a deal that would see China's Sinopec Group acquire controversial oil rights in northern Iraq through its purchase of Swiss oil giant Addax Petroleum, Chinese media said Wednesday.

Iraq has now recognised Addax's development of the Taq Taq oilfield in its northern Kurdish region, after first threatening to blacklist Sinopec for pursuing rights there without consulting Baghdad, the China Business News reported, citing an unnamed Sinopec executive.

Sinopec, Asia's largest refiner, agreed to purchase Addax in June for 7.2 billion dollars in China's largest-ever overseas acquisition.

The Switzerland-based company, listed in London and Toronto, is one of the world's largest independent oil producers with fields in Nigeria and in the Kurdish region of northern Iraq.

Baghdad has repeatedly said it is opposed to the autonomous Kurdish region signing its own contracts, a position which Kurdish officials have thumbed their nose at by inking dozens of agreements with foreign firms.

However a Sinopec executive said the Chinese state-controlled company's commercial operations were not affected by tensions between Iraq's central government and Kurdistan officials, the Chinese report said.

The media report follows comments by Iraq's oil ministry Monday that said Sinopec may be disqualified from new tenders for oil and gas fields if it bought Addax.

"We sent a letter to Sinopec... If it confirms the purchase of Addax, we would consider blacklisting it," Iraq's Deputy Oil Minister Abdul Kareem al-Leaby was quoted as saying by Dow Jones Newswires.

Sinopec officials were not immediately available Wednesday for comment.

The refiner, along with other Chinese government-backed oil firms, is jostling for overseas acquisitions, seizing on the economic crisis and low asset prices to secure energy supplies for China's growing economy.