Genel Energy, the company headed by the former BP chief executive Tony Hayward, is expanding its operations in Kurdistan.
The move comes despite a renewed bar on exports from the autonomous region and an unresolved payments dispute between Baghdad and Erbil.
The company is buying a 23 per cent stake in the Bina Bawi concession by acquiring A&T Petroleumfor US$175 million (Dh642.8m).
"The transaction fits neatly with our strategy of building our Kurdistan resource base through the steady, considered addition of promising acreage," said Mr Hayward.
Bina Bawi lies next to the Taq Taq oilfield, where Genel produces its 41,000 barrels per day (bpd) of Kurdish crude. Its partners in the new concession include OMV, based in Austria and owned in part by Abu Dhabi's International Petroleum Investment Company. Exploration work has already unearthed crude reserves.
Genel - a merger between the namesake Turkish exploration and production company and the Mr Hayward-led Vallares investment vehicle - estimates its proven reserves in Kurdistan to stand at 356 million barrels, and its production volumes make it the largest oil player in the Kurdish region.
The venture represents a gamble by Mr Hayward, who left BP in 2010 in the aftermath of the Deepwater Horizon oil spill in the Gulf of Mexico.
At about 175,000 bpd, Kurdistan's production is small compared with Iraq's total output of about 3 million bpd. A stable security situation and easily accessible reserves make it coveted territory for international oil companies (IOCs), however, and the bulk of the 50 or so active in Iraq operate in the autonomous region.
"This deal … confirms our continuing confidence in the immense potential of the Kurdistan region," said Mr Hayward.
Baghdad has looked northwards with unease, fearing that increasing Kurdish oil wealth and control over its mineral resources would fan secessionist sentiments. It has refused to acknowledge the contracts between the Kurdish Regional Government (KRG) and foreign oil firms, and insists on controlling the flows of oil out of the region.
IOCs in Kurdistan can be reimbursed only for the costs of production, and payments have so far been limited to two batches totalling about $600m in the first half of last year.
The central government also has an informal blacklisting policy for companies operating in Kurdistan, preventing them from bidding for concessions elsewhere in Iraq. More worrying for Genel, the KRG last month suspended its crude exports as no further payments from the ministry of finance in Baghdad had been forthcoming.
Genel's share price has since plummeted, losing more than 30 per cent of its value since a high in early February.
The company's stock value yesterday languished at an all time low of £638.5 per share on the London Stock Exchange.
twitter: Follow and share our breaking business news. Follow us
iPad users can follow our twitterfeed via Flipboard - just search for Ind_Insights on the app.