Registration of Oil Companies in Iraq

Introduction

The oil and gas sector forms the backbone of the Iraqi economy and stands among the most regulated and legislated industries in the country. Since engaging in any petroleum-related activity requires a duly licensed legal entity, understanding the regulatory framework governing the registration of oil companies is essential for every investor or service provider seeking to operate in Iraq.

1. General Legal Framework

The Companies Law No. (21) of 1997 (as amended) serves as the principal legislation governing the incorporation of local companies and the registration of foreign company branches with the Registrar of Companies at the Iraqi Ministry of Trade.
Broader investment activities fall under the Investment Law No. (13) of 2006 (as amended); however, this law explicitly excludes the exploration and production of oil and gas from its scope, reserving their regulation exclusively to the Federal Ministry of Oil.

2. Legal Registration of Oil Companies

Any company seeking to enter the Iraqi market may proceed through one of two main routes:

A. Establishing a New Iraqi Company

Registration with the Registrar of Companies.

Defining the company’s capital and business scope in the Articles of Association.

Obtaining an official Certificate of Incorporation.

B. Registering a Branch of a Foreign Company

Submitting duly legalized and certified corporate documents from the parent company.

Opening a local bank account and appointing a resident branch manager in Iraq.

No business activity may be conducted prior to the issuance of the registration certificate by the Ministry of Trade.

Upon completing these formalities, companies engaged in the oil and gas field must obtain approval from the Ministry of Oil before carrying out any activity related to exploration, production, or technical services.

3. Sector-Specific Licensing by the Ministry of Oil

The Ministry of Oil is the sole federal authority empowered to grant licenses for petroleum operations. The main categories of such licenses include:

Exploration and production service contracts (awarded through licensing rounds).

Licenses for the construction and operation of refineries, pursuant to the Investment in Crude Oil Refining Law No. (64) of 2007 and its amendments.

Registration and pre-qualification of suppliers and service companies with national operating companies such as Basra Oil Company and Missan Oil Company.

4. Registration in the Kurdistan Region

The oil sector within the Kurdistan Region is administered by the Ministry of Natural Resources (MNR), which operates under its own framework for company registration and contract management.
However, the Federal Supreme Court’s decision of February 15, 2022 declared the Kurdistan Oil and Gas Law of 2007 unconstitutional, reaffirming the supremacy of federal authority over the management of hydrocarbon resources.
Accordingly, companies are advised to carefully assess the legal risks associated with entering into contracts in the Kurdistan Region without prior federal approval.

5. Additional Compliance Requirements

Adherence to health, safety, and environmental (HSE) standards issued by the Ministry of Oil.

Compliance with the legally mandated Iraqi workforce employment ratios.

Tax registration and social security enrollment for all employees.

Submission of annual financial and technical reports in accordance with the company’s line of business.

Conclusion

Iraq’s legal framework demonstrates a balanced approach between encouraging investment and maintaining rigorous regulation of the oil and gas sector. To ensure full compliance and mitigate legal risks, companies are strongly advised to consult with a qualified legal advisor before undertaking any incorporation or contractual procedures.
Hamurabi Iraq provides specialized legal consultancy to oil and gas companies seeking to enter or expand their operations in the Iraqi market in accordance with the latest legal frameworks and regulatory standards.