Iranian Energy Economics

The Comparative Study of Benefits Distribution Between Parrties of Buy Back, Production Sharing Contract and Iran Petrouleum Contracts (IPC) (A Case Study of Soroush and Nowruz Oil Fields)

Document Type : Research Paper

Authors

Sharareh Kavosi 1
Mohammad Ali Falahi 2
Mohammad Javad Razmi 3

1 Ph.D. Student of Economics, Ferdowsi University of Mashhad International Campus

2 Professor of Economics at Ferdowsi University of Mashhad

3 Associate Professor Ferdowsi University of Mashhad

https://doi.org/10.22054/jiee.2018.9101
Abstract
In regulating oil contracts applying the appropriate contractual framework is necessary to meets the interests of both parties and maximize the absorption of foreign investment and advanced technology. In terms of distributing benefits between parties, the key element is the contract optimum flexibility. Flexibility of financial regime in buy back contracts, participation in production and Iran new oil contracts through simulation of the financial model using Excel software and Visual Basic programming language under two rigorous and conventional scenarios has been studied for the first t in this manuscript. In rigorous scenario the parameters of buy back contract between Iran national oil company and Shell Co. and parameters of two other contracts are estimated in such a way that original and achieved results are the same. Then, the effect of the estimated parameters on the distribution of gross income and the efficiency of the parties is investigated and with the aim of analyzing the degree of flexibility of contracts, the sensitivity of the efficiency and receipts of the parties to the changing price and capital costs is studied. Results showed financial regime in participation contracts allow the parties to coordinate the contents and structure of the contract with its benefits. While some of the inefficient tools of buy back and Iran new oil contracts have led to a lack of optimal flexibility in changing economic conditions.

Keywords

BuyBack
Production Sharing
Iran Integrated Petrouleum Contracts
Flexibility

  • Receive Date 28 October 2018
  • Accept Date 11 September 2018
  • First Publish Date 11 September 2018
  • Publish Date 21 March 2018

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