UPDATE 1-Baghdad no legal ground to cancel Exxon deal-lawmaker

LONDON Jan 31 (Reuters) - Baghdad has no legal right to cancel a major oil contract with Exxon Mobil in retaliation for its involvement in semi-autonomous Kurdistan, the head of Iraq's parliamentary oil and energy committee said on Tuesday.

"There are no blacklists in parliament," Adnan al-Janabi told Reuters on the sidelines of an oil conference in London.

Exxon became the first major to move into the northern Kurdish region in mid-October when it signed a contract for six exploration blocks. The Kurdistan Regional Government (KRG) is locked in a feud with the Arab-dominated central government in Baghdad over territory and oil rights.

The Iraqi oil ministry has said Exxon's deal is illegal and could result in termination of its contract to develop the major West Qurna Phase One oilfield in the south.

"The contracts (signed) by the central government and the Kurdish region are not fully constitutional. We need to pass the oil law to set up the federal council, which can then approve all of the contracts," Janabi said.

OPEC member Iraq is struggling to pass a modern oil and gas law to help settle disputes, including those surrounding oil production-sharing contracts signed by the KRG with foreign companies.

Speaking later to reporters, Janabi said: "It is less than constitutional because everything in the oil industry should be done in cooperation or jointly by the government, the region, which is Kurdistan and the governors. Nothing less than that is constitutional."

Deputy Prime Minister for Energy Hussain al-Shahristani said in December that Iraq was considering sanctions on Exxon for signing a deal in Kurdistan without approval.

"We will give them the power through the law and not allow one party, whether it is al-Shahristani or (Iraq Oil Minister Abdul-Kareem) Luaibi ... to quarrel over the body of Iraq and mess up the oil industry of Iraq," Janabi said.

Exxon has not commented publicly on the agreement, and Iraqi oil officials say the company has not responded to their requests for an explanation.