Law Studies
Hamidreza Afshari; Abbas Kazemi Najafabadi; Ali Emami Meibodi; Nooshin Jabbari
Abstract
Iran's Ministry of Petroleum due to empowerment of Iranian companies for executing local mega projects, regional and international markets penetration and upgrading national technology in petroleum upstream industry, predicted a competent Iranian partner called Exploration and Production (E&P) companies, ...
Read More
Iran's Ministry of Petroleum due to empowerment of Iranian companies for executing local mega projects, regional and international markets penetration and upgrading national technology in petroleum upstream industry, predicted a competent Iranian partner called Exploration and Production (E&P) companies, for cooperating with the International Oil Company (IOC) in Article Four of the Cabinet Approval. Now considering the absence of IOCs, it seems that the capacity of other oil contract models to be used by Iranian oil companies should be examined. The purpose of this paper is to investigate the feasibility of Concession agreements’ execution, by an E&P company in Iran’s upstream industry. The research method is descriptive and analytical and governing laws of Iran are reviewed in this study. Since the host government makes the final decision on the conduct of oil operations, it cannot be described as domination of oil resources, and therefore does not seriously contradict the Iran’s Constitution. Furthermore, E&P companies will not be subject to Article 81 of the Constitution. In the Oil Laws, the only restriction on the inflow of foreign capital in the upstream industry of Iran has been observed, which again does not apply to E&P companies. In the Laws of the Five-Year Plans, this restriction of oil laws has been adjusted too much in which it seems that the restriction has also been removed for IOCs. Finally, the investigation shows that there are no major legal barriers in applying Concession agreement in case that the operator is an Iranian E&P company.
Oil and Gas Economics and Management
Shima Sakhaei; Abbas Kazemi Najafabadi
Abstract
Various types of hazard exist in the upstream oil and gas industry. Therefore, the contracting parties of any petroleum contract always try to reduce the inevitable economic burdens of occurring adverse events arising out of risks in the course of petroleum operation by applying legal approaches such ...
Read More
Various types of hazard exist in the upstream oil and gas industry. Therefore, the contracting parties of any petroleum contract always try to reduce the inevitable economic burdens of occurring adverse events arising out of risks in the course of petroleum operation by applying legal approaches such as contractual risk allocation provisions, which can be realized by drafting efficient insurance and indemnity clauses as the subset of risk allocation provisions. Hence, this study addressed the main research question of “What are the necessary parameters for drafting the insurance and indemnity clauses in the main types of upstream petroleum contracts?”. To this end, the mentioned clauses stipulated in the main types of upstream petroleum contracts, including concessions, production sharing, and service contracts of 15 different countries worldwide, in addition to the comparative analysis with the new model of Iranian Petroleum Contract (IPC), are examined. Eventually, the hypothesis of this study verified that there should be several parameters such as liability towards risks, limitation of liability, and exclusions/exemptions for drafting the insurance and indemnity clauses in these contracts, that is, the result and the answer to the research question. Moreover, the comparative analysis of the extracted set of parameters needed to draft these clauses legally, with the related ones in IPC, is conducted. Therefore, the existing contractual shortcomings are detected. After that, the necessary suggestions to resolve them are offered, which can enhance the effectiveness of the upstream petroleum contracts and avoid potential litigation in this regard.
