Petroleum Business Review

Abstract The Islamic Republic of Iran has recently introduced the fourth generation of oil buyback contracts, known as the Iran Petroleum Contracts (IPC). The main objective of these new contracts is to attract foreign investment in the Iranian oil and gas sector. While the IPCs address certain risks associated with the Iranian Petroleum Buyback Contracts from the contractor's perspective, there are still additional concerns for contractors. To gain a comprehensive understanding of the risks associated with these contracts, this study takes a multi-faceted approach. Firstly, it provides an overview of upstream contracts in the oil industry. It then to identify and monitor all contractual and non-contractual risks linked to IPC contracts conducts a combination of qualitative methods (library and documentary research and Delphi method) and quantitative methods (interviews and questionnaires with 50 industry experts and companies involved in buyback, using techniques Fuzzy AHP, and Fuzzy TOPSIS). Through the use of these methods, the study aims to provide investors with valuable insights into the potential risks of the IPCs and assist NIOC in effectively responding to and monitoring these risks, thereby encouraging investment in the development of Iran's oil and gas projects.

Abstract This article examines how capital market instruments, particularly Islamic bonds (sukuk), can finance Iran’s petrochemical value chain through a hybrid Rial–foreign-currency model. The study is motivated by post-sanctions capital-market constraints in Iran, notably currency volatility and limited access to foreign funding, and by a gap in research on multi-currency Islamic financing solutions. It proposes a multi-layer financing structure combining Rial and foreign-currency Ijārah sukuk tranches and applies doctrinal legal analysis to the relevant Sharīʿah contracts and Iranian regulatory framework. To make the quantitative claims transparent, a stylised five-year quarterly model of an export-oriented methanol project is used. Under the illustrative assumptions, the annual weighted average cost of sukuk debt falls from 30.24% in an all-Rial structure to 20.07% in a 50/50 hybrid structure, while mean DSCR increases from 1.28x to 1.45x and the share of periods below 1.0x falls from 37.5% to 25.2%. The hybrid structure may broaden the addressable investor base, but actual implementation remains conditional on sanctions compliance, foreign-exchange approvals, transferability of export proceeds, and settlement arrangements.

Abstract This study investigates the nonlinear dependence between the daily logarithmic returns of global WTI crude oil prices and exchange rates in three major Asian oil-importing economies-China (CNY/USD), India (INR/USD), and Japan (JPY/USD) -over the period 2000–2024. A two-stage GARCHCopula framework is employed, in which the marginal distributions are modeled using a GARCH(1,1) model with a skewed Student's t distribution, followed by the estimation of Gaussian, Student's t, Frank, Plackett, Clayton, and Gumbel copulas to characterize the dependence structure. Results indicate that the oil price–exchange rate relationship is nonlinear in all three countries, although its strength and pattern differ substantially across economies.The Gumbel copula provides the best fit for India, indicating asymmetric dependence with pronounced upper-tail dependence, whereas the Student's t copula is selected for both Japan and China, revealing symmetric tail dependence.

However, the dependence in China is considerably weaker than that observed in India and Japan, suggesting a more limited transmission of oil price shocks to its foreign exchange market. Overall, the findings demonstrate that the transmission of oil price shocks is heterogeneous across the three economies, with the observed differences being broadly consistent with country-specific structural characteristics, including energy import dependence and exchange rate regimes.From a policy perspective, the results suggest that India should strengthen oil price risk hedging and exchange rate risk management, while Japan and China should continue to monitor tail risks and maintaining exchange rate stability during periods of market stress. These findings Highlight nonlinear and tail dependence in oil–exchange rate dynamics.

Abstract Oil and gas investment disputes often arise from corporate structures built around special purpose vehicles, joint ventures, project finance, and layered ownership chains. When a host state terminates a concession, revokes a license, alters fiscal terms, or intervenes in regulation, the immediate legal injury is usually suffered by the locally incorporated project company. Yet the same injury is transmitted economically to foreign shareholders through diminished share value and lost dividends. This phenomenon, known as reflective loss, places investor–State arbitration between two legal logics. Methodologically, the study adopts a doctrinal and case-law-based approach, interpreting treaty text and leading arbitral awards together with corporate-law rationales and sector-specific investment structures. Corporate law normally treats the company as the proper claimant for harm to corporate assets, while investment treaty law frequently protects shares as investments and permits shareholders to bring claims in their own name. The resulting tension is especially acute in the hydrocarbon sector, where the same project may generate contractual claims by the operating company, treaty claims by direct and indirect shareholders, and parallel proceedings by consortium participants. This article argues that reflective loss should not be treated as a simple jurisdictional defect. Instead, it should be managed as a system design problem through a structured approach that characterizes the loss, controls procedural multiplicity, and disciplines remedies. The proposed framework seeks to preserve treaty protection while preventing double recovery and incoherent awards in oil and gas arbitration.

Abstract We estimate the health-expenditure cost of wintertime sulfur dioxide (SO2) released when power plants near Tehran burn mazut (heavy fuel oil) in place of natural gas during winter shortages. We assemble a daily panel of 1,330 five-digit postal zones over 2018–2023, some 500,000 postal–day observations, linking ground-station pollution monitors and meteorological records (IRIMO, ERA5) to administrative pharmacy transactions for respiratory medicines. Identification uses a source-aware wind instrument combining downwind alignment, wind speed and inverse-distance weights to two plants, restricted to the heating season. Ordinary least squares with postal and month–year fixed effects gives a 1.3 per cent rise in same-day respiratory-drug expenditure per microgram per cubic metre of winter SO2 (SE 0.3). Two-stage least squares yields a larger semi-elasticity of 0.078 (SE 0.010), consistent with attenuation from measurement error and with the instrument isolating high-emission episodes; the first stage is strong (Kleibergen–Paap rk F ≈ 38). Placebo tests randomising wind direction or rebuilding the instrument from fictitious plant locations, and a falsification test on the previous day's expenditure, are all insignificant. Effects accumulate beyond the exposure day, the cumulative fourteen-day response being 0.017 (SE 0.006). Placed in a social-cost framework in which two of four bridging multipliers are measured within the same data, the morbidity cost of the observed SO2 increment is 0.72 per cent of the affected population's health expenditure under the cumulative coefficient and 3.52 per cent under the instrumental-variables coefficient. Both are lower bounds: mortality and non-health damages are excluded.

Abstract Industrial Smartization Governance in Oil and Petrochemical Industries: A Context-Grounded Organizational Capability Architecture
Purpose: This study develops a context-grounded organizational capability architecture for governing industrial smartization in safety-critical oil and petrochemical environments. Methodology/Design: A qualitative, exploratory theory-building single-case design was used. Semi-structured interviews with 15 senior managers and experts were analyzed through contextualist reflexive thematic analysis and abductive reasoning; a subsequent appraisal by 12 experts assessed content adequacy and contextual applicability. Originality/Value: The study moves beyond isolated transformation enablers by explaining how managerial microfoundations are configured into five functionally differentiated but mutually reinforcing capability domains. Findings: The architecture comprises strategic leadership and transformation direction, human-centered transformation, data-driven and technological integration, operational process and performance optimization, and organizational learning and adaptive renewal. Implications: The architecture offers a diagnostic and implementation basis for capability orchestration while defining clear boundaries for transferability and future multi-case and quantitative testing.Keywords: Socio-technical adaptation; Process safety management; Capability orchestration; Industrial resilience; Digital governance mechanisms.