Introduction to a theoretical framework for evaluating petroleum contracts from an optimal production policy point of view: Iran’s Buyback Contracts.
In this article, compared the definition of optimal policy and implementation in theoretical framework, it would be shown that this specification is favorable for the government as the owner of the exhaustible resources in any contractual framework. However if that planning for developing reservoir obtain then could be have; A-Flexibility, B-Long-term planning horizon, C-integrity and comprehensiveness of decisions and D-ability to attract financial resources and know how . If mentioned provision in planning considered then it could be ensured about optimal policy and implementation for reservoirs. Study of the buyback contract, showed that for the reasons of determination of reservoir development model, contractor work commitment, investment costs cap and sustainable production profile before signing the contract and etc., actually contract provisions could not be obtained.   Regarding to the  transfer of the field  operation right after the completion of development phase  to the National Iranian Oil Company (NIOC) it seems on time accomplishment of  optimal design and exploration EOR projects will faced by the measures taken by the contractor in the past. Study of the conceptual model of new Iranian Buy-Back contracts is presented to that an important part of structural problems of old buyback contract is considered. Flexibility in the design and implementation development models of reservoir, using the latest data available (the possibility of phasing development), flexible financial model and operational (annual capital budget, the possibility of repayment of all capital costs) and reward model based on production profile from the reservoir, which is the most important reforms as a prerequisite for the preservation of policy is considered.
JEL Classification: M11,O13,Q35