Iraq's oilfields burn gas every hour of every day. The flares are often discussed as an environmental issue, and they are. But at their core, they are a business failure: a valuable product being destroyed because the commercial, financial and organisational systems needed to sell it are not yet in place.
Gas monetisation, the process of turning associated gas into revenue, is fundamentally a management challenge. Engineering solutions exist and are proven. What determines whether gas is captured or burned is economics, contracts, risk allocation, financing and execution.
For professionals who want to lead this kind of commercial decision-making, 360 Leaders' Oil & Gas Business Management Training Courses build the skills needed to evaluate, structure and manage energy investments.
The Value Being Burned
Start with the numbers. The World Bank found that global flaring increased for a third consecutive year to 167 billion cubic metres in 2025, worth an estimated $54 billion.
Iraq is at the centre of the problem. The World Bank grouped Iraq with Russia and Iran as the three largest flaring nations, which together burned around 84 billion cubic metres, nearly half the world total. Nine countries, including Iraq, were behind 83% of global flaring while producing only 46% of the world's oil.
For Iraq, the business cost is doubled. The country is OPEC's second-largest oil producer yet has been a net gas importer, flaring roughly half of its estimated 3.12 billion cubic feet per day of gas until 2023. It has paid for that gap by burning polluting liquid fuels in power plants and importing gas and electricity from Iran at high prices.
In simple terms, Iraq has been burning a product at home and buying a substitute from abroad.
Why Gas Gets Flared: A Business Perspective
If the gas is valuable, why is it burned? The answer usually lies in commercial barriers rather than technical ones.
1. High Upfront Capital
Gas gathering networks, compressors, treatment plants and pipelines require major investment before any revenue flows. Oil, by contrast, can often be sold with far less infrastructure.
2. Low or Uncertain Gas Prices
Where domestic gas prices are set low, or where buyers have a weak payment record, the return on gas capture projects may not justify the risk.
3. Unclear Ownership and Rights
Contracts that focus on oil production may not clearly define who owns associated gas, who pays to capture it and who benefits from selling it.
4. Fragmented Supply
Many fields produce gas in modest volumes, spread over wide areas. Aggregating supply into economically viable projects requires coordination across operators.
5. Execution Risk
Large gas projects involve many partners, long timelines and complex contracting. Delays and cost overruns can erode returns.
Each of these barriers is a management problem, and each has a management solution.
How Successful Projects Solve the Business Problem
Two projects in southern Iraq show what works.
Joint Venture Structures That Share Risk
Basrah Gas Company is a public-private venture between the Ministry of Oil's South Gas Company (51%), Shell (44%) and Mitsubishi (5%). The structure combines state ownership of the resource with private capital and operating expertise.
Its business model is clear. BGC sells dry gas into Iraq's gas grid and produces LPG and condensate for local use and export. Multiple product streams spread revenue risk, with export-grade liquids helping support project economics.
Access to International Finance
Strong governance attracts capital. In 2021, the IFC arranged a first loan of $360 million to part-fund BGC's BNGL expansion, which aimed to raise processing capacity by about 40%. In 2025, the IFC was mandated to arrange a second loan of up to $500 million. The IFC's original investment was also certified as a Green Loan, believed to be Iraq's first.
The lesson for managers: projects with transparent reporting, credible partners and measurable environmental benefits can access cheaper, longer-term financing.
Bundling Projects to Improve Economics
TotalEnergies' Gas Growth Integrated Project takes a different approach, packaging four linked investments into one deal. It combines flared gas recovery from three southern fields, Ratawi field redevelopment, a 1 GWac solar farm and a seawater treatment scheme.
Bundling allows stronger oil revenues to help support gas and water infrastructure that might struggle to attract investment on its own. The partnership spreads risk across TotalEnergies (45%), Basra Oil Company (30%) and QatarEnergy (25%).
The outcome serves national priorities too: the gas plant is designed to fuel about 1.5 GW of power generation for roughly 1.5 million households.
Where Business Models Still Fall Short
Even strong projects face commercial friction. BGC has operated below design capacity partly because raw gas is diverted to power plants running oilfield equipment. And it draws raw gas from only three major fields: Rumaila, Zubair and West Qurna 1. Extending gas capture further will require new commercial models for smaller, more scattered sources.
The Management Toolkit for Gas Monetisation
Leaders evaluating or running gas capture projects rely on a core set of business skills.
Investment Appraisal
Evaluating net present value, internal rate of return and payback under different price, volume and cost scenarios. Sensitivity analysis helps identify which variables matter most.
Commercial Contracting
Structuring gas sales agreements, processing and tolling arrangements, and take-or-pay terms that provide predictable revenue while fairly allocating risk.
Stakeholder and Partnership Management
Aligning ministries, national oil companies, international operators, contractors, lenders and local communities, each with different priorities.
Risk Management
Identifying and mitigating technical, market, credit, political and regulatory risks. In Iraq, buyer payment security and regulatory stability are often decisive.
Project and Portfolio Management
Delivering complex infrastructure on time and on budget, and deciding which fields to prioritise for connection first.
Performance Measurement
Tracking flared volumes, capture rates, plant availability and product sales against clear targets. What gets measured gets managed, and gets financed.
Beyond Revenue: The Wider Business Benefits
Gas monetisation creates value beyond direct sales:
- Import substitution: domestic gas reduces spending on imported fuel and power
- Industrial growth: Iraq imports petrochemicals and gas-based products that could be manufactured locally, with domestic gas supporting new industries
- Employment: GGIP construction alone was expected to employ 7,000 Iraqi nationals
- Emissions reduction: worldwide, flaring produced about 429 million tonnes of CO2-equivalent in 2025, a growing concern for investors and trading partners
- Energy security: reliable domestic fuel supply strengthens national resilience
Skills for the Next Phase
As Iraq expands gas capture, demand is growing for professionals who understand both the technical and commercial sides of the energy business. Key roles include:
- Commercial managers who negotiate gas sales and partnership agreements
- Project directors who deliver complex facilities
- Finance professionals who model project economics and secure funding
- Planners and strategists who prioritise investments across fields
- Senior leaders who align government, partners and communities
Develop Energy Business Expertise with 360 Leaders
360 Leaders' Oil & Gas Business Management Training Courses help professionals build the commercial, financial and leadership capability needed to manage modern energy operations.
Topics across the programme include:
- Oil and gas industry structure and value chain economics
- Investment appraisal, project economics and financial modelling
- Petroleum contracts, joint ventures and partnership agreements
- Gas marketing, pricing and commercial negotiation
- Risk management and strategic planning
- Project and portfolio management
- Performance management and operational excellence
- Leadership in a changing energy industry
The courses combine practical frameworks with real industry case studies, and suit managers, engineers moving into commercial roles, finance professionals, planners and executives across oil, gas and energy organisations.
Frequently Asked Questions
What is gas monetisation?
It is the process of turning natural gas, including associated gas from oil production, into revenue through sales, power generation, products or industrial use.
Why does Iraq still flare gas?
Mainly because of commercial and infrastructure barriers: high capital costs, pricing and payment challenges, contract gaps and fragmented supply.
How are Iraqi gas capture projects financed?
Through joint ventures between state companies and international partners, integrated project packages, and international lenders such as the IFC.
Who should attend oil and gas business management courses?
Managers, commercial specialists, finance professionals, project leaders, planners and executives in oil, gas and energy organisations.
From Burning Cost to Business Value
Iraq's flares are a clear signal of untapped commercial value. Projects in Basra show that with the right partnerships, contracts and financing, flared gas can become a profitable, strategic asset. The next wave of progress will depend on managers and leaders who can build the business case and deliver it.
Turn energy challenges into commercial opportunities. Explore 360 Leaders' Oil & Gas Business Management Training Courses and register today.
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