Volume 8, Issue 28 (7-2017)                   jemr 2017, 8(28): 35-73 | Back to browse issues page

XML Persian Abstract Print

Download citation:
BibTeX | RIS | EndNote | Medlars | ProCite | Reference Manager | RefWorks
Send citation to:

Financial and Economic Evaluation of the Iran Petroleum Contract "IPC": Case Study of the Darquin Filed (phase III). jemr 2017; 8 (28) :35-73
URL: http://jemr.khu.ac.ir/article-1-1415-en.html
Abstract:   (5101 Views)
Addressing the economic components of the fiscal regime of the Iran Petroleum Contract (IPC), in this article the fiscal simulation of the contract has been developed. Most important fiscal parameters of the contract are: Capex and Opex, Cost of Money, remuneration fee, amortization period and R-factor. Technical information of the Darquin field (phase 3) has been used as a case study for this paper. The results show some merits and demerits. The most important output of the model is that the contractor's take is so small (about 3% in the discounted manner and the IRR of Contractor can’t exceed some amount (14.6%) by price increasing, showing the service nature of the contract. According to the results, remuneration fee is the most significant factor which can affect the IRR and take of the contractor, so its level should be determined carefully regarding the fiscal simulation model. Another issue which should be paid attention to is the determination of R-factor and remuneration fee slides. The fiscal regime is regressive in the levels of price lower than $50 and is progressive in the higher levels, but the profitability of the contractor in the higher levels is constant in absolute terms which can reduce the attractiveness of the contract. One of the major defects of the contract is the Gold-plating issue which is raised because of using R-Factor mechanism. Using the saving index can mitigate the problem notably.
Full-Text [PDF 3000 kb]   (5081 Downloads)    
Type of Study: Applicable | Subject: انرژی، منابع و محیط زیست
Received: 2016/05/16 | Accepted: 2017/07/11 | Published: 2017/09/17

1. Ahmadian, M. (1997),'Auction Instrument Effects on Oil Extraction and Exploration', OPEC Review. March. [DOI:10.1111/1468-0076.00022]
2. Lazzari, Salvatore, Pirog, Robert (2008), Oil Industry Financial Performance and the Windfall Profits Tax, CRS report for Congress, RL43689.
3. Lei Zhu, ZhongXiang Zhang, Ying Fan (2015) "Overseas oil investment projects under uncertainty: How to make informed decisions?", Journal of Policy Modeling, Volume 37, Issue 5, September-October 2015, Pages 742-762 [DOI:10.1016/j.jpolmod.2015.08.001]
4. Luo Dongkun, Yan Na (2010) "Assessment of fiscal terms of international petroleum contracts" Petroleum Exploration and Development, Volume 37, Issue 6, 756-762. [DOI:10.1016/S1876-3804(11)60009-8]
5. Smith, James L. (2012), Modeling the Impact of Taxes on Petroleum Exploration and Development, International Monetary Fund, WP/12/278. [DOI:10.5089/9781557754455.001]
6. Stauffer, T.R. and Gault, J.C. (1985), 'Exploration Risks and Mineral Taxation: How Fiscal Regime Affect Exploration Incentives', Energy Journal, 6 (Special Issue). [DOI:10.5547/ISSN0195-6574-EJ-Vol6-NoSI-10]
7. Van Meurs, P (2009) "Commentary on the Iraq Draft Technical Service Contract"
8. Vcrlcgcr. P.K. (1980). 'An Assessment of the Effects of the Windfall Profits Tax on Crude Oil Supply'. Energy Joirnal, 1 (4) [DOI:10.5547/ISSN0195-6574-EJ-Vol1-No4-3]
9. Yusgiantoro, P., Hsiao, F. (1993) "Production sharing contracts and decision-making in oil production", Energy Economics, 15, 1993, 245-256 [DOI:10.1016/0140-9883(93)90014-I]
10. Zhao, Xu, Luo, Dongkun, Xia, Liangyu (2012), Modelling optimal production rate with contract effects for international oil development projects, Energy Journal, 45, 662-668 [DOI:10.1016/j.energy.2012.07.028]
11. Taherifard, A. (2008), analyzing of economic structure of Production Sharing Contracts on the oil production, from the point of view of the IOCs using dynamic optimization method, Quarterly Energy Economics Review, 5(18), 161-175

Add your comments about this article : Your username or Email:

Rights and permissions
Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

© 2023 CC BY-NC 4.0 | Journal of Economic Modeling Research

Designed & Developed by : Yektaweb