TThe New Model of Iran Petroleum Contract (IPC) and the Problem of Technology Transfer in Oil Industry

In this Article, two subjects were examined: the legality of involving a joint operating venture in the exploitation operations in the oil sector and; the type of technology required for the transfer and its beneficiary. Upon examination, we found that establishment and engagement of a joint venture in the production of oil was legitimate and had no legal hurdle. We also demonstrated that beneficiaries of the transfer were personnel of both the joint operating venture and of the NIOC. As to the type of technology, our conclusion was that only end product technology used in the production of oil could be the subject of transfer.
In reality, however, technology transfer was very limited. It was confined to obsolete operating technology. Several reasons in this respect were suggested, among which the nature of technology employed in the production of oil constitutes a major one i.e. it is knowledge based and mostly composed of skills needed for transforming inputs into outputs; those for expanding capacity (such as management, engineering and procurement) and those necessary for creating new products or processes. Since, neither of these technologies are codifiable, their owners keep them confidential and hence, avoid any technology transfer.