International Petroleum Agreements

Participation agreements: the NOC is “carried” by an international oil company (IOC). The NOC weighs on the IOC by not fully compensating the IOC for the risks involved in exploration or for making a commercial discovery. The IOC suffers the total losses and therefore needs greater success to compensate, depending on NOC`s share, in the joint venture. But the IOC benefits, for example, from the fact that the NOC is treated as a partner in nationalist treats. “Tax aspects” refer to mechanisms that have a direct impact on the amount and date of a government and a company`s share of project revenues. A “project” refers to a company`s decision to invest in both exploration and development of each discovery. These mechanisms can be defined by legislation, specific licensing agreements or government decisions concerning oil companies. For the purposes of this document, all constitute the oil agreement on the activity. This document deals only with the tax aspects of oil exploration agreements between oil companies and host governments. These agreements also include a large number of non-tax provisions that are not dealt with here.

The oil and gas industry operates in countries around the world in accordance with a number of types of agreements. These agreements can generally be categorized into one of four categories (or a combination of categories): risk agreements, concessions, production sharing agreements (PSA, also known as production sharing contracts, PSCs) and service contracts. Traditional concession agreements before 1940 were granted to large territories, sometimes to the whole country, for example. B irak. These grants were long-term (50 to 99 years). The IOC has had all the discretion and control to explore and verify whether or not a particular field can develop. The tax conditions of oil contracts are primary non-resource factors that international oil companies take into account when wishing to enter a country. The attractiveness of tax conditions has a fundamental influence on the feasibility and economic benefits of a project for international oil companies and is an important indicator of the country`s investment environment in the oil industry. The government has shortcomings in taking into account the attractiveness of tax provisions for oil contracts in different countries, it merely reflects the relationship between the overall income of governments and overall income, neglects the effects of the various government timetables on international oil companies and the attractiveness of the treaty.