Exxon Mobil is moving "along the right path" after meeting with Iraq's Prime Minister Nuri al-Maliki, but must deal with its disputed Kurdistan deals before any final agreement on it staying in southern oilfields, an Iraqi oil official said.

Exxon had been seeking to pull out of the country's huge West Qurna 1 oilfield after fighting with Baghdad's central government over deals it signed with autonomous Kurdistan in the north, contracts Iraq's oil ministry rejects as illegal.

Exxon's top executive on Monday met with Maliki and industry sources said the Iraqi government has made an offer to Exxon now in an apparent bid to keep the U.S. company working in the southern field.

"After the meeting with Maliki, we can now say that Exxon is moving along the right course the central government has set for foreign oil companies working in the country," the Iraqi oil source said without giving any details.

"At the same time we understand Exxon has to fix its issues with the Kurdistan Regional Government before we can reach a final agreement on continuing working in the south," he added.-Reuters