Unification in Iranian Petroleum Contracts Model (IPC)

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