IRANIAN ENERGY ECONOMICS
Year:2015 | Volume:4 | Issue:15 |Papers Count:6

In recent years, in addition to conventional sources of gas, production from unconventional sources is also possible. Iran as a second-largest conventional gas reserves in the world and the fourth producer, intends to enter the gas competition, increase its share in the global gas trade. The purpose of this study is to investigate the long-term exploration, extraction and production of gas and the impact of unconventional gas production. To achieve this objective, System Dynamics approach is used. The model developed consists of three sub-system conventional gas exploration and production cycle, investment and global demand and for the period 2001-2035 is simulated. Model validity is approved and simulation results indicated that, with current trends, the life of undiscovered gas reserves in Iran from 400 years to less than 30 years will be reduce in 2035. Gas production rising from 100 BCM in 2001 to more than 500 BCM in 2035. In other words, the gas production in Iran will be about 5 times over a period of 35 years. Applying scenarios such as increasing the rate of exploration, increased investment in development and increase investment in technological improvements will lead to an increase in gas production. However, the development of unconventional gas could reduce demand security of gas in world and reduce the Iranian gas production in a long- term period. At the same time taking into account all scenarios can increase gas production and thus offset the decline in production is due to the expansion of gas production from unconventional sources.

In spite the global efforts to reduce energy intensity; Iran’s energy intensity has been increasing during the recent decades. To get a more detailed investigation of energy intensity, this study aims at decomposing energy intensity into its components including efficiency and structural change as well as at examining driving forces behind Iran’s energy intensity components during 1973-2011. Energy intensity decomposition showed that efficiency changes accounts for the most of increased energy intensity. It is found in this study that income (GDP), capital- labor ratio and urbanization are the most determinants of energy intensity and its components. Regarding the non- linear relationship between energy intensity and driving forces of income and capital- labor ratio as well as the estimated turning points, income plays a significant role in increase of energy intensity while capital- labor ratio tends to induce a reduction in energy intensity. Although urbanization has a positive contribution to energy intensity via structural changes component, its dominant effect on improved energy efficiency leads to an overall effect of reduced energy intensity by more than 1.8% as 1% increase in urbanization. The results showed a limited effect for price and share of industry in GDP and left no significant role for economic integration and foreign direct investment. The corresponding value for these variables remain less than 0.05%.

The measurement and assessment of energy intensity of economic sectors, especially in developing countries, compose a foremost objective of contemporary energy policy. The Iranian industry sector has more than 25 percent of gross domestic products which has important role in determining effective factors on enrgy intensity. In this study the Logarithmic Mean Divisia Index (LMDI) was applied for energy intensity decomposition analysis with additive and multiplicative method introduction for Period of 2004-2011. The results show that energy intensity in the mentioned period had increased in industry sector. Additionally, intensity effect and activity effect have the most shares in energy intensity docomposition respectively. Also, the results indicate that chain- linked decomposition versus period- wise one has more actuall and reliable results applying for policymakers.

Utilizing modern financing methods have been focused by governments either for low public budgets or for higher cost productivity of private sector. The financing method of Build- Operate- Transfer (BOT) is one of the most applicable methods for participation of private and public sectors. This paper examines two price determination methods in Iranian electric industry and compares them. Two pricing methods are compared in this paper: 1) two parts pricing (i.e. one part of price is extended and one part of price is non- extended during the operation period of the project) and 2) one part pricing (i.e. totally extended pricing during the operation period of the project). The results show that applying either model depends on policies of government against deregulation of prices.

Pricing and risk sharing in oil and gas service contracts such as buyback has always been the most important challenges in the contracting design. Asymmetric information leads to agency costs such as moral hazard and adverse selection and the process of contracting is complicated. In this paper, by using of agency theory, the process of buy- back contracts is modeled between the National Oil Company (NOC) and International Oil Company (IOC) with regard to moral hazard in case of risk averse and risk- neutral contractor. Finally, Mathematical modeling techniques are used to provide analysis of agency costs, and then optimal contract is extracted. An optimal contract is a contract in which the contractor will bear part of the increased costs. The results show that there is not corner solution for offering a contract, but the equilibrium relationship can be created between moral hazard, competition in the bidding and sharing the risk.

The 2012 Petroleum Act outlining the tasks and authority of the Iranian Petroleum Ministry allows implementation of new contractual models including partnership with domestic and foreign investors and contractors in compliance with protective production without transfer of the ownership of oil and gas of the reserves. Although this law refers to the general contractual partnership models which can be interpreted as production sharing, profit sharing, or, but it seems that the most suitable interpretation of this clause is using production sharing contracts in Iranian oil and gas industry because of following reasons; first, the ownership of oil and gas of the reservoirs would not be transferred to foreigners. Second, the nature of the contract allows the partnership in investment to result in the partnership in production. Third, due to the specific characteristics of the upstream sector, mostly the production sharing contracts have found applications in achieving the exploration and development (E & P) as well as production. Forth, the previous production sharing contracts concluded before the Islamic Revolution are available and can be used as reference in this regard. Thus, the main elements of such contracts can be outlined by referring to the terms and conditions of similar previously concluded contracts.