Abstract

Nowadays, conducting upstream oil and gas operations without a suitable partner is almost inconceivable. Such cooperation may take the form of either an equity joint venture or a contractual joint venture, the latter not resulting in the creation of a separate legal entity. With regard to recognition and acceptance, equity joint ventures are clearly provided for under Iranian law, falling within “legally established companies” (pursuant to Article 20 of the Commercial Code). However, the prevailing approach in upstream oil and gas operations favors contractual joint ventures without establishing a company, whereby partners’ relationships are governed by a joint operating agreement. Accepting contractual joint ventures and joint operating agreements in Iran poses serious challenges due to the lack of explicit legal provisions and divergent views in Islamic jurisprudence, which underpins the legal system. This article attempts to analyze these common petroleum partnerships in light of recognized legal institutions and social necessities. To this end, de facto companies and civil partnerships are examined to assess the applicability, legitimacy, and validity of contractual joint ventures and joint operating agreements. Despite similarities with de facto companies, such equivalence is not precise; nonetheless, these partnerships can be validly considered within the broader concept of civil partnership, although the prevailing jurisprudential opinion deems all types of civil partnership (except property partnership) invalid.