The U.S. State Department on Wednesday called on the Iraqi government and Exxon-Mobil Corp. to resolve their dispute over oil development in the Arab nation in a proper way.\"The continued rapid development of Iraq\'s oil sector is in everyone\'s interest and we look to the government of Iraq and Exxon-Mobil to resolve this issue in a way that will not impede future progress in this critical sector,\" the agency said.It said that the department has always advised all U.S. oil companies, including Exxon-Mobil, that they incur \"significant political and legal risks\" by signing any contracts with the Kurdistan Regional Government in northern Iraq before national agreement is reached on the legal framework for the hydrocarbon sector.\"We have been clear on this issue but, at the end of the day, U. S. companies make their own market-based decisions,\" the agency added.The central government in Baghdad, which is wrangling with the Kurdistan Regional Government over territory and oil rights, had warned that any deal foreign companies sign with Kurdistan would be deemed illegal.Iraqi Deputy Prime Minister for Energy Hussain al-Shahristani said on Tuesday that the government was mulling sanctions on Exxon- Mobil, which became the first major oil company to sign deals with the Kurdistan Regional Government.