Petroleum Business Review

Abstract Companies have access to various financial resources to implement available profitable investment projects, settle overdue debts, increase working capital, and pay dividends to shareholders. Correct decision-making and the ability of companies to determine the appropriate financial resources are the main factors in company success. The effects of financing on the company’s return and risk are the most important goals that management should consider when choosing a financing method and selecting resources that minimize financing costs. In this research, the fuzzy Delphi method was first used to identify financing methods and the criteria for selecting the appropriate financing method. Then, the AHP method was used to prioritize the parameters. This study showed that efficiency, cost, sustainability, operationality, fairness, and transparency are the most important criteria for selecting financing methods in gas companies. Forming subsidiary consortia, receiving facilities, issuing participation bonds, creating an investing company, presence in the stock market, creating a shareholder plan have also been identified as financing methods

Abstract Currently, the global community is on the threshold of a transition from fossil fuels as a result of transformations such as climate change, entailing the strict implementation of carbon setoff policies and quick progress in green technologies. A transition to clean, low-carbon energies will not only disrupt the global energy system, it will also impact the global economy and political dynamism within and without all states. Based on these transformations, the present article asks the question of how the energy transition will impact the geopolitical future of the global oil economy. The authors hypothesize the following in answer to this question: Given the superior, more advanced position of economic powers such as China and the US in clean energy technologies, we are likely to witness the weakening of traditional oil powers in a post-carbon world, such as the Middle East and North African countries (MENA) and Russia; in contrast, the balance of power will tilt heavily towards current energy consumers. Technology-savvy countries have the knowledge to reproduce and stabilize their power in the global economy. The traditional countries of the energy sector, however, face shortfalls in their infrastructure and modern technologies and will lose their geopolitical position to a large extent.

Abstract The Iranian economy is intensely affected by the size of the government and oil income. Oil incomes might influence the relationship between inflation and government size since financing the budget in Iran is based to a significant degree on oil revenues. Due to the significance of government size and oil income on the price level, the oil revenue-government size-inflation nexus in Iran during the period 1991-2021 is considered. Estimation results of a Markov switching model recommend that government size incorporates a significant positive affect on inflation. Moreover, the growth of oil income is found to have a significant negative affect on the inflation. Based on the findings, it appears that there are two regimes being considered: Regime 1, which represents a high inflation regime, and Regime 2, which represents a low inflation regime. Our findings suggest that once in the low inflation regime (Regime 2), there is a moderate chance of remaining in that state. However, if initially in the high inflation regime (Regime 1), there is a higher probability of staying in that state and a lower probability of transitioning to the low inflation regime.

Abstract Financial performance evaluation emerged as a great academia and business concern in the competitive world today. In order to clarify the progress status and improvement trend of finance, it is of supreme significance to appoint a professional financial performance evaluation study for the supportable progress of enterprises. This research focused on the seven critical factors which represented principal effects on the financial performance of the Persian Gulf Petrochemical Companies. Experts and engineers of 12 companies in Persian Gulf Petrochemical Company have been surveyed by sampling method, in which 180 questionnaires have been completed, and the basis of the work has been used to achieve the research objectives. The confirmatory factor analysis (CFA) approved the divergent validity of all desired factors and correspondent to the questionnaire. The nonparametric analysis demonstrated the study’s central hypothesis regarding the effectiveness of all under investigation parameters to meet the research goals. By the Friedman ranking test, the internal processes and external environment of the organization provided the highest and the lowest rank of impact on the financial performance of the petrochemical companies under review, respectively.

Abstract The purpose of this research is choosing the effectiveness function of entrepreneurial outsourcing under themes of bureaucratic culture in Golestan Gas Company by Analysis CARD and Developed Theory of Rough (ERST). The statistical population of the study included two qualitative and quantitative sections, in which 14 experts in the fields of management and entrepreneurship participated in the form of panel members and in the quantitative section, 25 managers and deputies in different layers of the gas company in Golestan province also participated. The basis of the analysis in this study was content analysis in order to identify the functional components of entrepreneurial outsourcing and propositions of bureaucratic culture themes. Raff's analysis set was also used for matrix analysis to identify the most important stimulus for promoting entrepreneurial outsourcing in the first section, and in the second section to select the most effective entrepreneurial outsourcing function under the theme of bureaucratic culture. The results showed that the most important proposition of bureaucratic culture is the proposition of codified systems and the most effective function of entrepreneurial outsourcing in Golestan Gas Company was strategic.

Abstract This study examines the effect of Iranian oil sanctions on the International oil market network for the first time with Complex Network Analysis (CAN) with Diebold -Yilmaz and Arch indexes from 1991:01 to 2019:12. The analysis was performed for two periods before and after the sanctions, and the results were compared. Results showed that the Iranian oil market in both networks before and after the sanction is one of the influential nodes in the oil network. The volatility spillover of the Iranian oil market in the oil network market has increased after the sanctions. Also, on Iranian oil, volatility spillover from other oil markets has to Iran increased after the sanction. But overall, the sanction has not had a significant impact on the oil market network. The Iranian oil market volatility was receiver before the sanction in the network, but its role changed after the sanction, and it became a sender node.

Abstract As a region rich in oil and gas resources, low energy prices, and a unique geopolitical position, the Middle East has been the focus of global attention, particularly for economic powers such as China and India. Due to the wide gap between energy supply and demand, especially for oil, the two countries have developed a special diplomacy for their energy supplies. Understanding the oil policies of Beijing and New Delhi as the main actors in the energy market of the Middle East is paramount for the leading oil-producing countries. By conducting a comparative analysis of the Delhi–Beijing oil policies in the Middle East, the present article will ask how domestic, regional, and international variables affect the Chinese and Indian oil policies in this region. The authors have compared the following critical variables in answer to this question: the legal structure and decision-making process, self-sufficiency levels, the geopolitical position toward the Middle East, oil diplomacy, the role of technology, and the international economic-political position of the two countries. Our findings show that the Beijing government has formulated its oil policy using a single, specific decision-making body in the energy sector. It has relied on expanding multilateral ties with other countries, long-term investments, long-term loans, expanding energy transfer pipelines, and long-term contracts to deepen its relations with oil-rich countries, particularly those in West Asia. On the other hand, India has based its diplomacy on short-term economic contracts, situation analysis, and needs assessment. It is, however, clear that both countries will continue to depend on oil from the Middle East in the medium term despite the threat of US sanctions

Abstract In this study, consumption datas of hydrocarbon energy carriers in Iran during the years 1982-2017 were collected. A seemingly unrelated regression (SUR) model in balanced panel data approach was proposed It can be beneficial to control energy demand. Results revealed that in the residential-commercial sector indicate that the consumption of hydrocarbon energy carriers with lag has a positive effect and the weighted average price of petroleum energy carriers includes a negative impact on the consumption of hydrocarbon energy carriers. In the industry sector, consumption of hydrocarbon energy carriers with lag includes a positive impact on the usage of hydrocarbon energy carriers, and the weighted average price of petroleum energy carriers has a negative effect on the consumption of hydrocarbon energy carriers. In the agriculture sector, the variables of energy intensity, value added of the agriculture sector, population and consumption of hydrocarbon energy carriers with lag have a positive impact on the usage of hydrocarbon energy carriers in this sector. In the transportation sector, gross domestic product, extremity of energy usage in the transportation part and consumption of hydrocarbon energy carriers with lag include a positive impact on the usage of hydrocarbon energy carriers in this sector and has a negative impact on the consumption of hydrocarbon

Abstract According to the form-out agreement the investor of the international petroleum agreement “farmor”, during the implementation of the project and due to various reasons such as lack of finance resources and/or incapability of contract performance, assigns provision of required investments for the purpose of performing an upstream oil project and/or certain operations (well drilling) under the upstream contract to other entities “farmee”, and generally in case of fulfillment of the aforementioned affairs by the farmee, the farmor transfers to the farmee a percentage of its participating interest in the international petroleum agreement upon permission from the host country. In line with this, through evaluating the upstream contracts in Iran, as well as the necessities for attracting investments for the purpose of performing such contracts, it is possible to find out the importance of clause concerning the assignment of contract in order for creating required legal instruments for entering into the farm-out agreement in accordance with the rules and regulations. So that through concluding farm-out agreement between the present and the potential investors, prevent emerging difficulties arising out of mere assignment of the contract to the potential investors during the implementation of upstream contracts.

Abstract The economic aspects of technological advances in the drilling industry using the maximum reservoir contact (MRC) method compared to other drilling technologies have been investigated in this study. Field and survey methods from combined implementation research methods have been performed by a dynamic approach using Vensim software. Professors, drilling and reservoir engineering professionals in the oil and gas drilling industry, or equivalent positions, comprised the study’s statistical population. Finally, 120 individuals were chosen by nonprobabilistic sampling (judgment) and the snowball method. In the Vensim dynamic environment, the simulation completion time (based on the 2017 dynamics model) and the initial simulation time (based on the 2013 dynamics model) were adjusted to generate a flow diagram analyzing the economic aspects of technological improvements in this type of drilling industry. According to the causal tree results, the drilling industry’s performance has the highest priority among studies of economic aspects of technological changes in the drilling industry using the MRC method. It has a significant relationship with technological changes in the drilling industry. The sensitivity analysis chart demonstrated that with a change in the variable of indicators of the drilling industry at an average level of 5.25 to 5.5, the target variable, i.e., the performance of the drilling industry, had the least sensitivity and had no particular effect on it. On the other hand, by modifying the effectiveness of the drilling industry, effectiveness indicators at the average level of 6.95, the target variable had the maximum sensitivity and had a very significant effect on it.

Abstract This research aims to identify the effective factors on sustainable supply chain in the National Iranian South Oil Company (NISOC). The method of data collection was mixed methods. In the qualitative section, data were collected through reviewing 32 previous studies as well as in-depth interviews with 10 faculty members and experts in the field of sustainable supply chain of crude oil and oil products of the NISOC using a Non-Probability Judgmental Sampling. The main dimensions were identified from interviews, and the dimensions were grouped in 13 main categories and 78 sub-categories. 13 main components included organizational factors, production products, sustainable supply chain, industry supply chain, macro policies, technology, customer, economic factors, deficits of supply chain, social factors, political factors, organizational performance, and organizational productivity. Second, through reviewing literature and previous studies, 72 open codes in 9 categories were identified, including strategies, blockchain technology, improving the economic environment, improving the social and environmental policies and laws, internal organizational solutions, external organizational solutions, environmental management, market and capital factors. In the quantitative part, the researcher-made questionnaire was applied in a preliminary study on 10 experts in the field of management, and its relative content validity is examined. Then the final and modified version was provided to 384 employees of the NISOC. SmartPLS software were used for quantitative evaluation of the model. The presented model helps industry managers and decision makers to significantly improve the performance of the supply chain by re-designing the supply chain and taking appropriate measures.

Abstract Considering the long-term nature of oil and gas contracts, managing the relationship between the parties to the contract is fundamentally important. In upstream oil contracts, according to the level of supervision and control of the host state over the petroleum project, the level of communication is variable. In risk service contracts due to extensive supervision, there should be a lot of interaction and cooperation between the parties. This study examines Kuwait's model of technical assistance services contracts. It concludes that, due to its improved cooperative structure, this format of service contracts is more compatible with current conditions in Iran's oil fields, such as southern Pars. These fields are operated by Iranian oil companies, but need more technology to function properly. In this article, it is discussed how Technical Assistance Contracts (TACs) can generate an efficient solution for the issue at hand. The methodology is based on describing and analyzing Kuwait’s TAC.

Abstract Today, management requires a new approach in the areas of production planning and operations process with a cost management approach. Organizations and industrial units to lead their lives, by recognizing the impact points of the challenges ahead and positive impact, guide and lead them to advance the goals of the organization. Economic dispatching with particle swarm optimization algorithm approach is an approach in the field of industrial units. Dispatching tries to determine the share of production capacity in a way that optimizes the overall performance of the system economically and improve system performance, including: production and process planning, supply and demand balance, cost management, productivity growth, optimal allocation of resources according to the capacity of tanks, formulation of production and operational strategies, the impact on the strategic vision document. In this research, an attempt has been made to perform economic dispatching with the approach of particle swarm optimization algorithm with hypothetical information to measure the feasibility of implementation and its impact on the overall performance of the system and production process and operations.

Abstract Despite numerous upstream communications, there is still no comprehensive and reliable model for implementing these tasks, neither in the literature nor in the oil and gas industry. Previously developed models focus more on the outsourcing process. It seems that no outsourcing model has been developed to utilize internal capabilities in a portfolio of alliances and be compatible with the unique characteristics of Iran’s oil and gas industry. In an attempt to validate the components of the “model of development outsourcing physical assets in the oil and gas industry, with the approach of upgrading internal capacity”, this study used a questionnaire in a Likert scale (very high, high, moderate, low, and very low). One hundred two people participated, and 100 completed questionnaires were received from the population. The validity of the variables and the questionnaire were examined using confirmatory factor analysis. SPSS and Smart PLS software packages were used in this research, and the error probability level (α) was considered 0.05. The results showed that the model has a good fit. According to the Geiser index, the fit of the model was medium to high, and the goodness of fit criterion was equal to 461.0, indicating the optimal fit of the model

Abstract As a significant consequence of internal and external characteristics in auditors, independence plays a vital role in promoting professional judgment in auditing. This dimension of individual audit functions has always been considered one of the areas studied in this profession due to its integration with the perceptual and often intangible features of auditors’ behavior. Therefore, this study, understanding the importance of independence functions in the auditing profession, seeks to identify the characteristics of inertia as a stimulus for independence in auditing in the petrochemical industry to act on its interpretive ranking. This research is a mixed method due to the nature of data collection. It first uses interviews to identify the characteristics of inertia in the auditing profession and then employs the checklists of the pair scale to determine the interpretive ranking. Accordingly, the grounded theory and the quantitative part are used in the qualitative part, and Delphi analysis and the interpretive ranking process are used. The statistical population in the qualitative section were 12 auditing professionals who, in terms of theoretical knowledge, had the necessary capabilities to develop the concept studied in this study. They were selected through theoretical sampling based on the snowball technique. The statistical population in the quantitative part were 19 auditors with work experience in the petrochemical industry and a level of technical and specialized knowledge; they were selected using homogeneous sampling. The research results in the qualitative part indicate the existence of 3 categories, 8 components, and 35 concept codes that have laid the inertial features in the auditing profession in the form of an 8-dimensional integrated model. On the other hand, the results in the quantitative part show that the percentage of influence of the locus of control feature is higher than other inertial features in the audit profession in the petrochemical industry, implying that the auditor’s encirclement on individual control in success and failure can avoid a set of external factors such as chance and lead fate in audit functions. In other words, an auditor with the characteristics of an internal locus of control tries to use his/her ability to express independent behavior in professional comments and judgments, regardless of external reasons

Abstract Market uncertainty is when investors have difficulty in assessing current and future market conditions because there is a lot of volatility in the market. This research was conducted with the aim of investigating the effect of environmental uncertainty and currency uncertainty on volatility of stock returns of Petrochemical and Petroleum Products Supplier companies which are listed in Tehran Stock Exchange (TSE); these companies are active in all areas of the supply chain from extraction to retailing. In order to achieve the objectives of the research, research hypotheses were tested based on a statistical sample consisting of 13 companies during a 10-year period from 2012 to 2021 through the GMM estimation method with EViews. The findings of the research show that environmental and currency uncertainties intensify the volatility of companies' stock returns. These uncertainties in the previous period have the opposite effect on the volatility of stock returns in the current period. Also, the relationship of trading volume and stock price variables with stock return volatility is negative, because when market uncertainty is high, traders are expected to move more towards stocks of safer companies. The greater the volatility of returns in the previous period, it is expected that this will intensify the volatility of stock returns in this period as well. Examining volatility of stock returns can be useful in analyzing market participants' motivations.

Abstract Iran is one of the most important oil and gas producing countries in the world with 153.8 billion barrels of crude oil and 33.5 billion cubic meters of gas accounting for 9.3% and 18% share of the total oil and gas reservoirs respectively. Rich hydrocarbon reservoirs along with a special geographical location are of the most important competitive advantages of Iran. The oil value chain has a special place in the social, economic structure and the level of the development of Iran. In policy-making, especially in global equations and in the long run, where uncertainty is an integral part, it is necessary to pay attention to this area. As a strategic knowledge, future studies can play an important role in mapping the future. In the current study, the possible and plausible futures of Iran’s fossil energies (oil and gas) in the 2035 horizon are presented in the form of four scenarios. In an environment where variables are dynamic and constantly changing, and uncertainty is high, using scenario building methods is preferable for long-term horizons. In this work, 30 drivers with a high uncertainty and impact on the future of Iran’s oil and gas were produced. Using the cross-impact analysis model and the balanced impact model, out of 41,472 possible scenarios, 10 scenarios with the maximum compatibility were obtained and presented in four scenarios: a clean scenario (low carbon), a bipolar Middle East scenario, a cooperation and development scenario, and a postponed dream scenario.

Abstract The purpose of job rotation policies is to create a talent pool for the organization along with mutual training of employees. Ensuring that a planned job transfer is beneficial to both the employee and the organization requires consideration of the organization and the company's value chain. The current research has been conducted with the aim of designing a job rotation implementation model based on the organization, methods, and value chain of Iran's National Gas Company. The qualitative research method is based on foundational data theorizing. Semi-structured interviews were used to collect information, and data analysis was done using the Strauss and Corbin method and the paradigm model. Sampling was done theoretically and with the benefit of targeted (judgmental) and snowball (chain) techniques, based on which 18 interviews were conducted with knowledgeable professors and experts in the field of human resource management and public administration. The results of the data analysis obtained from the interviews during the process of open, axial, and selective coding led to the creation of a job rotation implementation model based on the foundation's data theory including 6 main dimensions, 64 sub-dimensions, and 186 characteristics.

Abstract This study aimed to develop Oil approaches affected by effective factors for the success of economy-based entrepreneurship in the Oil Industry. In other words, efforts were made to identify and prioritize the factors affecting the development of Oil approaches under the impact of effective factors for the success of economy-based entrepreneurship in the Oil Industry. A review of the previous studies in this field revealed that the factors affecting the development of Oil approaches affected by factors involved in the success of economy-based entrepreneurship in the Oil Industry were institutional, organizational, environmental, economic, technological and opportunity recognition criteria. The present research was applied in terms of goal and survey, cross-sectional regarding data collection method and time frame. The statistical population consisted of experts in the country’s oil industry system. In total, 16 individuals were selected from the central bank managers by purpose sampling. Data were collected using an expert questionnaire, and the fuzzy Delphi method was applied to ensure the validity of the identified indicators. In addition, the reliability of paired comparisons was assessed by calculating the incompatibility rates via the Gogus and Butcher method. In this regard, reliability was acceptable in all cases of less than 0.1. The ranking of key criteria showed that economic factors had of the highest importance, followed by institutional, environmental, organizational, opportunity recognition process, and technological factors.

Abstract The present article aims to examine the risk of host governments’ interference with the property of foreign investors (expropriation) in the petroleum industry. Host states have the police power to make regulatory changes. The “police power” is defined as the inherent and plenary power of a sovereign to make all laws necessary and proper to preserve public security, order, health, morality, and justice. It is a fundamental power essential to government, and it cannot be surrendered by the legislature or irrevocably transferred away from government. The government can interfere with the contract, change the terms, or directly take the investment. This is why international petroleum disputes and arbitration practices have addressed such risk. For this purpose, the concept of property and compensable property rights under international law are significant. Indeed, expropriation conveys a deprivation of a property owner of this property. This paper assesses the concept of expropriation, the international legal requirements for a lawful expropriation, and then analyzes the relevant international arbitral awards in petroleum jurisprudence.  

Abstract Cell Formation Problem (CFP) is a famous issues in group technology, where an analyst aims at forming groups of machines/parts (so-called cells), in such a way that machines in every cell process as much as possible parts from this cell and as less as possible parts from other cells. In this article, a Harmony Search Algorithm (HSA) is designed to solve the CFP. In order to evaluate the performance of the proposed algorithm, 35 sample classical problems are examined. The experimental results indicate desirable performance of the proposed algorithm. In addition, applicability of the proposed algorithm is demonstrated by a real-world case in project human resource management. Since the megaprojects in oil industry require a wide range of jobs, thus grouping of individuals with considering their skills is an important challenge. The paper defines the job grouping problem as a CFP, and solve a real-world problem using the proposed HSA.

Abstract The purpose of this study is to analyze the most effective basis for assessing the intellectual capital maturity based on the themes of the ambidextrous learning link. In terms of purpose, this research is part of developmental research. Because of the lack of a basis for assessing the intellectual capital maturity under ambidextrous learning in previous research, based on meta-synthesis in the first step, an attempt was made to identify components as the analytical basis of the research and propositions as reference variables. Then, in order to explain the identified components and propositions, in a small part, intuitive fuzzy sets (IFSs) was used to determine the most effective basis for evaluating the intellectual capital maturity based on the themes of the ambidextrous learning link. In this study, the target population consisted of two parts: qualitative and quantitative. In the qualitative section, with the help of 16 management specialists and experts, an attempt was made at the university level to identify research components and propositions in the form of score forms. In the small section, 50 managers, officials and experts at various levels of knowledge-based companies participated. The results showed that the proposition of strategic tendencies in learning is considered as the most influential themes of the ambidextrous learning link in the studied companies, which strengthens the sustainability of knowledge creation as an effective component in the intellectual capital maturity.

Abstract Host countries invite international oil companies (IOCs) to conduct petroleum operations because the industry is naturally high cost, high risk and long term. Most governments don’t wish to risk its own capital and are better off avoiding the significant costs, risks and uncertainties associated with petroleum operations. In business relationships in the oil industry, IOCs enjoy high degree of technologies, skills and enough capitals often not available to the host countries and they are better poisoned to implement operations and take the risks if their policies are great achieved. IOCs follow their own policies and seek to obtain the most commercial and legal advantages such as reserve booking, high percentage of rate of return, assignment of their contractual rights and obligations, independent governing laws and dispute settlement and good governance on the project structure. The main objective of this article is to enumerate the key golden rules which IOCs are looking for in their business with the host countries or the NOCs and we are going to figure out to what extent IOC’s rules are satisfied in Iran's service contracts (buy-back and IPC).

According to our findings, although new Iran’s Petroleum Contract so-called IPC improves the buy-back’s terms and structure, for example, the remuneration for production is now on a per barrel basis, there are numerous weaknesses and other features that put IPC and buy-backs, as the risk service contracts, into the last IOC’s preference among other contractual regimes in the world.

Abstract The agreement of Iran with an integrated bloc like the Shanghai Cooperation Organization or Eurasian Economic Union to boost energy trade is considered an efficient factor in improving the multilateralism and regionalism of the Iranian economy. However, the outbreak of COVID-19 has had caused serious and unprecedented consequences on globalization and regionalization. This research seeks to find out the relationship between COVID-19 and regional energy integration for two cases of South Asia and the Eurasian Economic Union (EEU). The panel data framework based on quarterly data over 2010Q1-2020Q2 is employed to estimate the coefficients of variables. The significant results reveal that the COVID-19 pandemic is a severe challenge for regional energy integration in these two unions. The integration of larger economies that are more developed and have a higher level of trade liberalization is disturbed by this pandemic. A policy implication based on the conclusions is that Iran may try to integrate regional energy with its neighbors and trading partners. However, to reduce the long-run negative impacts of the pandemic, Iran and its energy trade partners should plan to determine the types and magnitudes of adverse effects of the pandemic, regulating monetary and fiscal policies to encounter the negative influences. To the best of the author’s knowledge, despite some earlier researches on the effects of COVID-19 on macroeconomic variables in different countries and regions, there is no existing literature focusing on how the coronavirus affects economic integration. Therefore, this paper tries to fill in this literature gap.

Abstract The global economy is expanding at a drastic pace, and energy is fundamental to nearly all economic activities and modern living standards. Sustaining the oil supply is a profound challenge in the oil and gas industry. One of the ways the industry is now looking to sustain supply is through developing oil rims, which were once considered uncommercial because of technology. Developing oil rim has its opportunities and challenges, on which this study has focused. This study aims to investigate the feasibility and viability of oil rim development, its opportunities and challenges, and the factors affecting its economic viability. The Troll Oilfield on the Norwegian continental shelf is used as a case study because it is an oil rim field. The economic analysis is based on historical production data of the Troll oilfield. A deterministic approach is used, which involves both cash flow and sensitivity analysis. Based on the economic analysis results, oil rim development is marginally economic and viable but on certain conditions: low CAPEX and high oil price. The type of technology used in developing oil rims determines the efficiency and economic feasibility of the development. The outcome of this study shows that technology has made oil rim development possible which was once considered uncommercial in the past, and oil price is the primary determinant of the viability of oil rim development