محمدعلی بهمئی

Host countries invite international oil companies (IOCs) to conduct petroleum operations because the industry is naturally high cost, high risk and long term. Most governments don’t wish to risk its own capital and are better off avoiding the significant costs, risks and uncertainties associated with petroleum operations. In business relationships in the oil industry, IOCs enjoy high degree of technologies, skills and enough capitals often not available to the host countries and they are better poisoned to implement operations and take the risks if their policies are great achieved. IOCs follow their own policies and seek to obtain the most commercial and legal advantages such as reserve booking, high percentage of rate of return, assignment of their contractual rights and obligations, independent governing laws and dispute settlement and good governance on the project structure. The main objective of this article is to enumerate the key golden rules which IOCs are looking for in their business with the host countries or the NOCs and we are going to figure out to what extent IOC’s rules are satisfied in Iran's service contracts (buy-back and IPC). According to our findings, although new Iran’s Petroleum Contract so-called IPC improves the buy-back’s terms and structure, for example, the remuneration for production is now on a per barrel basis, there are numerous weaknesses and other features that put IPC and buy-backs, as the risk service contracts, into the last IOC’s preference among other contractual regimes in the world.