Document Type : Scientific paper
Authors
1
Economic department, Allameh university, Tehran, Iran
2
Department of Private Law, Faculty of Law and Political Science, Allameh Tabatabaei , Tehran, Iran
3
, Department of Theoretical Economics, Faculty of Economics, Allameh Tabataba'i University, Tehran, Iran.
4
Department of Law, Faculty of Law and Political Science, Allameh Tabataba'i University, Tehran, Iran.
5
Department of Finance and Banking, Faculty of Management and Accounting, Allameh Tabataba'i University, Tehran, Iran
10.22080/mrl.2026.30178.2203
Abstract
This research conducts a comparative study and analysis of the financial and economic dimensions of the two contractual models of Iran Petroleum Contract (IPC) and Azerbaijan's Production Sharing Agreement (PSA), focusing on the case study of the shared Block 1 field in the Caspian Sea. The research method is based on financial simulation using real field data, and taxation issues and financial indicators such as internal rate of return (IRR), net present value (NPV), payback period, and the parties' share of the field's profits. The results show that although at the macro-project level, the financial indicators are similar in both models, the contractor's share in the IPC is 6.3%, and with a negative net present value and low internal rate of return, it is unattractive to foreign investors. In contrast, PSA with an internal rate of return of 12.6%, a net present value of $214 million, and a 29% contractor share creates a greater investment incentive. The main difference is the IPC's limitations on cost recovery, fixed remuneration structure, and lack of flexibility compared to the profit oil sharing mechanism in PSA. Based on the findings, reforms such as increasing the cost recovery ceiling to 60%, determining a reasonable base fee, reviewing the R-factor mechanism, and anticipating the necessary incentives, especially for common fields, can increase the attractiveness of Iran's IPC contracts to create contractual competitiveness between common fields from a comparative perspective.
Keywords
Main Subjects
)