By Rania El Gamal

BASRA, Iraq (Reuters) - The final draft of Iraq's multibillion-dollar deal with Royal Dutch Shell to capture flared gas at southern oilfields will be completed within 10 days, a senior Iraqi oil official said on Friday.

The $12 billion deal, which includes Japan's Mitsubishi, involves capturing associated natural gas produced at fields near the oil hub of Basra, including Rumaila.

"We are confident that the final draft will be completed within a week, 10 days maximum," Deputy Oil Minister Ahmed al-Shamma told reporters at an oil conference in Basra.

Last month Oil Minister Hussain al-Shahristani told Reuters the contract would not include the supergiant 12.6-billion-barrel Majnoon oilfield which is being developed by Shell and Malaysian partner Petronas.

It will cover Rumaila, being developed by BP and CNPC; Zubair, being worked on by ENI, Occidental and KOGAS; and West Qurna, whose two projects are in the hands of Exxon and Shell, and Lukoil and Statoil.

The Oil Ministry delayed finalizing the deal with Shell and Mitsubishi in September because of legal issues about the joint venture.

Iraq flares 1 billion cubic feet of gas every day at its oilfields -- energy it needs to harness to generate electricity in a country suffering from chronic power blackouts more than seven years after the U.S.-led invasion.

Shamma said Iraq's current cabinet has the authority to sign the contract, adding he was waiting for legal advisers to review the final draft.

Iraqi politicians have been jockeying for position in a new government since an election in March that failed to produce a clear winner. Two weeks ago the squabbling factions reached a power-sharing deal and on Thursday Prime Minister Nuri al-Maliki was given 30 days to pick a new cabinet.

(Reporting by Rania El Gamal, writing by Jason Benham; Editing by Jim Loney)