Abstract
The operating activities of the petroleum sector require large amounts of money and high levels of experience and technology that cannot be provided exclusively by most oil-producing countries or their public companies. Therefore, concluding a petroleum exploration and production contract is necessary to address the rights and obligations of the host State and international oil companies; while, various types of petroleum contracts have been developed to address those rights and obligations. In the Kurdistan Region, as an oil-producing region, oil and gas resources are being explored and produced by international oil companies, under production sharing contracts. This study attempts to appraise traditional and modern types of petroleum exploration and production contracts in detail, to examine the fundamental differences and similarities between them; and also to analyse the Kurdistan Region’s production sharing contracts. This research has clarified that the traditional contracts of different types of petroleum contracts are quite different, however, the modern contracts have many provisions in common. Therefore, currently, the choice of contract type might be less important than the content of particular contractual provisions. Finally, the research has clarified that the Kurdistan Region’s production sharing contracts comprise several positive provisions that have attracted a wide range of international oil companies to invest in the Kurdistan Region. Keywords : The Kurdistan Region of Iraq, The Kurdistan Regional Government, Production Sharing Contract, Concession Contract, Service Contract, Joint Venture Contract, International Oil Company, Traditional and Modern Petroleum Contracts. DOI: 10.7176/JLPG/101-17 Publication date: September 30 th 2020
Highlights
Oil and gas are the most important sources of energy in the world and they are being used in almost all activities such as production and transportation
The PSC could be for exploration, development and production (EPSC) of a certain field, or it could be for no exploration, but only for the development, which is known as development and production sharing contract (DPSC)
This study has demonstrated that there are various classifications for the main exploration and production oil and gas contracts, in order to regulate the relations between the host State and the international oil companies (IOCs)
Summary
Oil and gas are the most important sources of energy in the world and they are being used in almost all activities such as production and transportation. In terms of Kurdistan petroleum sector, oil and gas resources are being explored and produced by international oil companies (IOCs), mostly under one type of petroleum contract which is the production sharing contract (PSC). The investor pays taxes or royalties to the state.”7 Through this type of contract, the host State grants exclusive rights to the contract holder to explore for, develop, sell and export petroleum resources for a specific long period of time in a specific broad territory. accessed 15 December 2019. 11 ibid. 12 S Tordo, D Johnston and D Johnston, Petroleum Exploration and Production Rights: Allocation Strategies and Design Issues: World Bank Working Paper No 179 (The World bank, Washington D.C. 2010) p. 9. 13 S A Mucci, ‘Managing Political and Investment Risk in the International Oil and Gas Industry’ PhD Thesis www.iiste.org all operations and the host State receives revenues from the investor who pays royalties (either in kind with oil and gas or in cash) and taxes on income earned from its petroleum operations, when hydrocarbons are produced
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