Requirements and Legal Nature of Crude Oil ‎Sales Contracts as a Method of Reimbursement ‎to Contractors in IPC Model Contracts

In the new model of Iran's oil contracts, the contractor is entitled to two types of payments for the risks incurred and the investment made. One is the reimbursement of expenses he incurred during the development and production period, and the other is the oversight of his profits as an oil contractor. In these contracts, according to the principle of ownership and sovereignty of the government and that all the extracted oil belongs to the government, it is foreseen that according to the nature of the contract and financing, part of the extracted oil is allocated to provide payment of these amounts. The offset process is done through the long-term oil sales contract. Dependence of the sales contract on the upstream contract, which is subject to basic rules such as ownership and sovereignty, along with the commercial nature of oil sales, require recognizing the nature of such contracts and analyzing them in the system of international trade law. This article seeks to understand this nature with a descriptive and analytical approach which finally leads to the conclusion that the nature of these contracts is a combination of private and public law rules with the predominance of powers based on public law of the host government.