Legal Analysis of Fiscal Obligations of International Petroleum Companies (IOC) in the Iranian Upstream Oil and Gas Industry Contracts (IPC)

Document Type : Original Article


1 Professor, Private Law, Faculty of Law, Shahid Behesti University

2 Assistant Professor, Private Law, Faculty of Human sciences, Islamic Azad University, Damavand Branch



Due to the huge capital costs in the fiscal regime of new Iranian upstream oil contracts called IPC, the International Oil Company is committed to be present in the oil possessed country and provide all the capital costs. Previously, in service contracts called buyback, remuneration was fixed and capital costs had a closed ceiling, which caused loss to international oil companies; thus International Oil Companies were reluctant to attend or invest in Iranian oil industry. Hence, the changes in this section of the new Iranian upstream oil contracts were motivating and attracted foreign investors. In fact, unlike service contracts called buyback, capital costs and noncapital costs have open ceiling. In these contracts, not only no fixed amount of remuneration exists, but also the remuneration increases in accordance with the increase of production. This leads to the increase of production and ultimately increases economic benefits for both parties. This article deals with the financial obligations of International Oil Companies in the new Iranian upstream oil contracts called IPC.


Main Subjects

Articles in Press, Accepted Manuscript
Available Online from 05 March 2022
  • Receive Date: 13 July 2020
  • Revise Date: 19 December 2021
  • Accept Date: 05 March 2022