Ali Emami Meibodi; Mehryar Dashab; Masoumeh Akbari Birgani
Abstract
The high average life of onshore facilities, entering the second half of the life of large fields, reducing the recovery factor of oil reservoirs and Iran's backwardness from the development of common fields are the most important challenges of the upstream part of Iran's oil industry.Due to the impossibility ...
Read More
The high average life of onshore facilities, entering the second half of the life of large fields, reducing the recovery factor of oil reservoirs and Iran's backwardness from the development of common fields are the most important challenges of the upstream part of Iran's oil industry.Due to the impossibility of financing and necessary capital from domestic sources, it is necessary to pay more attention to foreign investment and its contractual methods in this field. Therefore, in this study, the financial-economic performance of Iran's service contracts model and Iraq is being studied and compared in terms of attracting foreign investment and financing projects for the development and exploitation of oil fields. in this regard, the financial simulation technique and sensitivity analysis of the contractor's rate of return on the changes in the financial parameters of the contractual models have been used. The results show that the IPC contract model provides better economic results for the contractor compared to buy back while motivating the contractor to achieve safe production, but the Iraqi service contract model due to the shorter payback period, which facilitates financing the project and reduces the risk of capital expenditure, especially at high oil prices is more attractive to the contractor.
mortaza khorsandi; Atefeh Taklif; ali faridzad; Ali Taherifard; ali saberi
Abstract
The choice of contract type in oil fields has always been one of the main and problematic challenges in Iran and elying in making decisions in this regard leads to a dely or non-investment. On the other hand, one of the ways to recognize the components of bargaining power is to recognize and ...
Read More
The choice of contract type in oil fields has always been one of the main and problematic challenges in Iran and elying in making decisions in this regard leads to a dely or non-investment. On the other hand, one of the ways to recognize the components of bargaining power is to recognize and evaluate various types of international contracts. Therefore, in thiss study, while introducing the fiscal model of the contractual agreement concluded in Iran, as well as a combination of contracts for participation in traditional production in Azerbaijan with Joint venture, has been applied to financial simulation in Duroud oil field. After explaining the optimization problem using the generalized reduction gradient method, the optimal production path from the perspective of the parties to the contract is estimated andcompared with the production path specified in the buy back contract. The results show that the use of share-based indicators of project revenues and the net present value of a project for evaluate of oil contracts can be misleading. The oil production path agreed in the Buy back contract is higher than the optimal production path from the perspective of both sides of the combined contract. Tthis is due to the desire of the International Oil Company to rapidly capture capex and remuneration fee in the shortest possible time. Increase in recoverable reserves due to gas injection (presented in MDP), which was approved in buy back contract is less than its optimal amount from the viewpoint of Joint venture in a hybrid contract. This indicates that the proposed hybrid contract is closer to the Maximum Effective Rate and Maximum Final Recovery from Oilfields than the conventional buy back agreement in Iran.
Mohammad Reza Shokouhi; Mahsa Soleimani; Rasoul Sheikhinezhad moghaddam; Aye Katebi
Abstract
In this paper, utilizing a cash flow model in an Oil field as a case study, we compare the efficiency of fiscal regimes of buy back and Iranian Petroleum Contract (IPC). In order to implement the mentioned comparison, we have selected influential financial indices such as: internal rate of return (IRR), ...
Read More
In this paper, utilizing a cash flow model in an Oil field as a case study, we compare the efficiency of fiscal regimes of buy back and Iranian Petroleum Contract (IPC). In order to implement the mentioned comparison, we have selected influential financial indices such as: internal rate of return (IRR), Net Present value (NPV), Payback period, Profit to investment ratio (PIR) and Government take (GT). Furthermore, considering three price scenarios, sensitivity analysis is performed for different oil prices. Subsequently, we model IPC comprising Enhanced Oil Recovery (EOR (/Improved Oil Recovery) IOR) operations and compare it with IPC without EOR/IOR in terms of the specified indices. Our results indicate that in addition to the more eligibility of IPC for contractors than buy back contracts, Government take is still adequate and noticeable enough in spite of the reduction it would confront in IPC. The paper concludes IPC comprising EOR/IOR is more beneficial to host government than E&P companies, therefore contractors do not have sufficient incentives to apply EOR/IOR operations in which the host government should lead the contractor toward by providing them with mutually acceptable options.
