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Economic Evaluation of Fiscal Regime of Buy-Back Contracts in Comparison with Production Sharing Contracts (Case Study: Azadegan Oil Field)

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  • Roohollah Kohan Hoosh Nejad

    (Faculty of Economics, University of Imam Sadiq (PBUH), Tehran, Iran.)

  • Davood Manzoor

    (Faculty of Economics, University of Imam Sadiq (PBUH), Tehran, Iran.)

  • Masoud Amani

    (Faculty of Law, University of Imam Sadiq (PBUH), Tehran, Iran.)

Abstract

Fiscal regime is one of the main differences between petroleum contracts. Fiscal regimes in oil contracts are divided to two main categories namely Concessionary and Contractual Systems. In contractual systems, the main difference between service and production sharing contracts is the way of compensation of contractor services which could be in cash or in kind. In production sharing contracts the contractor receives a portion of produced oil. One of the main criteria to compare fiscal regimes is government and contractor takes in real values. Comparing the net present value of contractor take shows that it could have been more desirable and cost effective to use production sharing contract in Iranian Azadegan oil field instead of Buy-Back.

Suggested Citation

  • Roohollah Kohan Hoosh Nejad & Davood Manzoor & Masoud Amani, 2018. "Economic Evaluation of Fiscal Regime of Buy-Back Contracts in Comparison with Production Sharing Contracts (Case Study: Azadegan Oil Field)," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 22(2), pages 579-598, Spring.
    • Handle: RePEc:eut:journl:v:22:y:2018:i:2:p:579
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    References listed on IDEAS

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    1. Silvana Tordo, 2007. "Fiscal Systems for Hydrocarbons : Design Issues," World Bank Publications - Books, The World Bank Group, number 6746.
    2. Ghandi, Abbas & Lin, C.-Y. Cynthia, 2012. "Do Iran’s buy-back service contracts lead to optimal production? The case of Soroosh and Nowrooz," Energy Policy, Elsevier, vol. 42(C), pages 181-190.
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