APPLYING DISCOUNTED CASH FLOW IN OIL INDUSTRY COMPENSATION VALUATION

Olumi Yazdi, Hamid Reza; Rashno, Mahdi

doi:10.22059/jrels.2020.278521.273

APPLYING DISCOUNTED CASH FLOW IN OIL INDUSTRY COMPENSATION VALUATION

Document Type : ISI

Authors

¹ Associate Professor of Law Faculty of Allameh Tabatabai University, Private Law Group

² PHD Student of International Oil & Gas Contracts in Allame Tabatabaei University, Faculty of Law

10.22059/jrels.2020.278521.273

Abstract

Since oil price is volatile and oil companies are affected, oil industry is bed of disputes. In this condition, finding appropriate method of compensation valuation is very important. We considered discounted the cash flow method in compensation valuation in oil industry disputes. This survey showed that high volatile cash flow and oil company future contingency are the most important obstacles for using of this method. Cash flow prediction based on oil price normalization, using scenario and sensitivity analysis are resolutions for removing obstacles of using discounted cash flow. For managing investment in oil industry in Iran, it has been suggested to agree on future cash flow and discounted rates before starting the project.

Keywords

References

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