Legal Research Quarterly

Legal Research Quarterly

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

Document Type : Original Article

Authors
Goudarz Eftekhar Jahromi 1
Mehdi Montazer 2
Mohammad Emamgholi 3
1 Professor of Law, Faculty of Law, Shahid Beheshti University, Tehran, Iran.
2 Assistant Professor, Faculty of Humanities, Islamic Azad University: Damavand Branch, Damavand, Iran.
3 PhD, Faculty of Law, Islamic Azad University: Tehran Central branch, Tehran, Iran. Corresponding Author Email: mohammademamgholi@yahoo.com
10.29252/jlr.2022.185122.1658
Abstract
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 losses to international oil companies; thus International Oil Companies were reluctant to attend or invest in the 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 ceilings. In these contracts, not only no fixed amount of remuneration for the investor exists, but also the remuneration increases with production increase. This leads to the investor’s more motivation and incentive to apply the latest existing industrial technologies for optimum production and ultimately causes an increase in economic benefits for both parties. This Article studies the financial obligations of International Oil Companies in the new Iranian upstream oil contracts called IPC descriptively and analytically.
Keywords
New Upstream Oil Contracts
Direct Capital Costs
Indirect Costs
Cost of Money
Exploitation Costs
Subjects
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References

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Articles

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  1. Montazer, Mehdi and Seyyed Nasrollah Ebrahimi, "The Position of Buy-Back Contracts in Iran’s Upstream Oil and Gas Projects and its Comparison with Production Participation Contracts", International Law Journal, No. 49, 2013. (In Persian)
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Thesis

  1. Alimoradi, Mohammad, "Applying the Theory of the Representation in the analysis of the Fiscal Provision of Oil and Gas Projects (Lease Sukuk, Participation and Oil and Gas Contracts)", PhD Thesis, Tehran: Faculty od Economics, Allameh Tabatabaee University, 2015. (In Persian)
  2. Javandel Jananloo, Farrokh, "Legal and contractual Structure of Iran’s New Petroleum Contracts", PhD Thesis, Tehran, Tehran University, 2017. (In Persian)
  3. Shirmardi Dezaki, Mohammad Reza, "Legal and Economic Comparative Study of New Concessionary Contracts with Production and Service Participation contracts in the Field of Oil Industry ", MA Thesis, Tehran: Faculty of Law and Political Science, Allameh Tabatabaee University, 2013. (In Persian)

Rules & Regulations

  1. The Duties and Authorities of the Petroleum Ministry Act, 2012.
  2. The Full Text of the General Terms of the New Petroleum Contracts, 2016.

  • Receive Date 13 July 2020
  • Revise Date 19 December 2021
  • Accept Date 05 March 2022