Private Law
Javad Kashani; Jafar Damanpak
Abstract
For decades, companies involved in the petroleum industry are committed to complying with International Petroleum Industry Practices (IPIP) or similar terms in performing most of their obligations and operations. This paper examines the consequences of a breach of IPIP in light of reviewing dispute resolution ...
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For decades, companies involved in the petroleum industry are committed to complying with International Petroleum Industry Practices (IPIP) or similar terms in performing most of their obligations and operations. This paper examines the consequences of a breach of IPIP in light of reviewing dispute resolution methods in different regimes governing the upstream sector. Reviewing disputes and lawsuits related to the breach of IPIP suggests the different enforcement methods under the various regimes of operation in the upstream sector. With regard to the Iranian petroleum industry, using the results of this comparative study, it was shown that due to the contractual regime used in the relations between the National Iranian Oil Company (NIOC) and International Oil Companies (IOCs) involved in the development of the Iranian upstream sector, any dispute over IPIP as part of contractual terms will cause new risks by triggering the arbitration mechanism. It was also suggested that the preparation of IPIP in the form of precise documents and their periodical update by relevant authorities, including the Ministry of Petroleum, may reduce disputes between the contracting parties (NIOC and IOCs) and determine the latter’s scope of authorities related to selection and application of IPIP.
Javad Kashani; Tohid Gholizadeh
Abstract
Following the enactment No. 104089 adopted by Cabinet Ministers of Iran on November 2, 2015 regarding general provisions and the structure of upstream oil and gas contracts model, new Iranian Petroleum Contracts Model (IPC) was presented at Tehran Summit on 28-29 November 2015. Based upon new contract ...
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Following the enactment No. 104089 adopted by Cabinet Ministers of Iran on November 2, 2015 regarding general provisions and the structure of upstream oil and gas contracts model, new Iranian Petroleum Contracts Model (IPC) was presented at Tehran Summit on 28-29 November 2015. Based upon new contract model, the contractor will be in charge of execution of exploration, appraisal, development and production operations over contract area for a period of more than twenty years. As a result, it is possible that a common petroleum field or structure exists between two or more contract areas. In this case, if appropriate legal and contractual mechanisms did not deal with this issue, it would lead to serious physical and economic waste of resources, which could put the national interests in danger. Fortunately, the draftsmen of the IPC were aware of this danger and addressed this issue in the IPC. However, this article shows that the related clauses are subject to numerous ambiguities. By conducting a comparative analysis of legal sources of several countries, this article proposes some solutions in order for the IPC to deal with situations where there is a common petroleum field or structure between two or more contract areas.
