The Nature of Petroleum Joint Operating Agreements in the Framework of IPC contracts

Document Type : ISI

Authors

1 PhD Candidate in, Department of Public Law in (Oil and Gas Law), Faculty of Law and Political Scienecs, University of Tehran, Tehran, Iran.

2 Assistant Professor ,Department of Public Law, of International Energy and Environmental Law, Faculty of Law and Political Scienecs, University of Tehran, Tehran, Iran.

Abstract

Article 11)1) of "General principles of the new Iranian Upstream Oil and Gas Contracts Approved by the Board of Ministers" in the framework of the new contract model known as IPC talks about a contract between one of the affiliated companies of the National Iranian Oil Company and a foreign oil company, which can be mentioned as the only case that mentions a joint operating agreement in the Iranian legal system. In the following article, in response to the basic question of what is the nature of this agreement, by collecting materials in a library method and using analytical-descriptive method, we finally found that although some may believe that the said agreement is based on the title of the agreement The operation contract is joint operating agreement, but the nature of the aforementioned agreement can be adapted to the service contract. The presence of this affiliated company, despite having a series of advantages and removing concerns about ensuring energy security and maintaining production in the hands of the government, as well as transferring technology to the host government, causes a conflict of interest. The occurrence of such a situation can threaten public interests and bring adverse consequences such as non-compliance with technical standards and inefficiency. Considering this fact, there is no doubt about the need to manage the conflict of interests in these contracts. As a result of proving this importance, the present research has emerged as a solution to manage the conflict of interests, and in this regard, the requirements related to transparency and strengthening the supervisory powers of the Petroleum Ministry were introduced as solutions to manage the conflict of interests, which makes it possible to not deny the presence of the state company overcame the aforementioned situation and its negative consequences in the production phase. It should be noted that the proposed solutions do not mean that there is no need for the legal existence of the comprehensive law in order to manage the conflict of interests on a marco level, and the vacuum of such a law is strongly felt in Iran's legal system. 

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Journal Of Researches Energy Law Studies
Volume 10, Issue 1
August 2024
Pages 25-48

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