Pursuant to the Constitution and laws of Iraq, the Ministry of Oil has the exclusive right to develop and produce oil and gas resources in Iraq. The Ministry has published template oil and gas service contracts following competitive bidding rounds for development rights at fields in Iraq.
The template contracts require operators to use and develop facilities to process and treat associated gas unless it is not technically and economically feasible. Flaring is prohibited except for testing and maintenance purposes with prior written consent and for emergency situations. In the event of an emergency flare, the operator must notify the Ministry and explain the situation and the necessity for flaring.
The template contracts provide that the operator shall finance and construct transport facilities if needed to deliver associated gas to the Ministry, upon prior agreement. In this case, costs and expenses may be recovered as supplementary costs.