Duval et al - Risk Service Agreements

full all chapter5 chapter6 chapter7 chapter8 chapter9

chapter4 chapter5 chapter6 chapter7 chapter8 chapter9

Transparency and Accountability

Policy, Legal and Contractual Framework

Sector Organization and Institutions

Fiscal Design and Administration

Revenue Management and Distribution

Sustainable Development

Duval, C., Le Leuch, H., Pertuzio, A., and Weaver, J., Risk Service Agreements (chapter 7), in International Petroleum Exploration and Exploitation Agreements: Legal, Economic and Policy Aspects, (New York: Barrows Company Inc., 2nd edition, 2009)

In this chapter, Duval et al observe that there are many variations of this kind of agreement. Essentially, however, the host country or its national oil company hires the services of an international oil company, both technical and financial capability. When there is a commercial production from the contract area, the international oil company is reimbursed for its costs and remunerated for its services and for the risk it has taken. The payment is always in cash. It is observed, however, that a service agreement may also provide for the payment of the service to be paid in kind. This type of agreement was developed in Iran and it is called a 'buy-back' agreement.

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