Investment Contracts in the Energy Sector

Document Type : Research Article

Authors

Department of Law, Faculty of Law, Collage of Farabi, University of Tehran, Qom, Iran

10.22059/jolt.2025.388693.1007362

Abstract

The Investment Promotion and Protection Law of Iran outlines two schemes for foreign investment: direct investment and contractual investment. In the first scheme, the investor proceeds with the investment by obtaining the necessary permits from relevant organizations without needing to enter into a specific contract with government bodies. In the second method, investment is made through a contract between the investor and one of the government organizations or companies, where the conditions, rights, and obligations of the parties are defined. This article first examines the reasons behind the focus on contractual investment within the energy sector and explains the challenges and limitations associated with it. It also analyzes the impact of Article 12 of the Removal of Competitive Production Barriers Law as a legal tool for facilitating contractual investments in the energy sector. The article further investigates some of the most important investment contracts in energy, including upstream oil and gas contracts, public-private partnerships, and energy conversion and power purchase agreements. Finally, the article suggests that in order to attract more foreign investments and enhance the quality of energy projects, conditions for direct investment should be established, and contractual processes should be designed more transparently and equitably to strengthen the private sector’s incentives to participate in these projects.

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References

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Private Law
Volume 21, Issue 2
Autumn & Winter
October 2024
Pages 203-218

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