Journal of Private Law

Journal of Private Law

Cost Classification and the Status of Cost Recovery in Concession, Production Sharing Contracts and Risk Service Contracts

Authors
Nasrollah Ebrahimi
Saide Ghasemi Moghaddam
Abstract
Without a doubt, the industry of oil and gas especially in the upstream section, is one of the most expensive industry of all. It’s so important to understand the nature of petroleum costs and cost recovery in major oil and gas contracts. The multiplicity and diversity in the nature of petroleum costs at one hand and the differences in points of view and contractual agreement regarding to these costs on the other hand cause the classification and nature of petroleum costs and their recovery to be uncertain and consequently, this uncertainty will facilitate the underlying contractual conflicts between oil company as the contractor and host government. This article tries to present a certain classification of petroleum cost with considering the similarities of petroleum operations and to clarify the cost recovery status in three major petroleum contracts with reference to some contractual samples.
Keywords
Petroleum Contracts
Petroleum Costs
Cost Recovery
Cost Ceiling
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Journal of Private Law
Volume 2, Issue 3
September 2014
Pages 27-58