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), ...
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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.
Davood Manzoor; Roohollah Kohan Hoosh Nejad; Masoud Amani
Abstract
Fiscal regime is one of the main differences between petroleum contracts. Fiscal regimes in oil contracts are divided in two main categories namely Concessionary and Contractual Systems. In contractual systems, the main difference between service and production sharing contracts is the way of compensation ...
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Fiscal regime is one of the main differences between petroleum contracts. Fiscal regimes in oil contracts are divided in two main categories namely Concessionary and Contractual Systems. In contractual systems, the main difference between service and production sharing contracts is the way of compensation of contractor services which could be in cash or in kind. In production sharing contracts the contractor receives a portion of produced oil. One of the main criteria to compare fiscal regimes is government and contractor takes in real values. Comparing the net present value of contractor take shows that PSC could have been more desirable and cost effective in Azadegan, Soroush & Norouz, Forouzan & Esfandyar oil fields than Buy-Back contracts.
