Review of Iran and Iraq Strategies for Exploitation of Common Oil Fields

The existence of numerous common oil and gas fields between Iran and the neighboring countries as well as Iran's less efficient exploitation of these fields compared with other beneficiary countries, has led the development of common fields to always be among the priorities of the Iran Petroleum Ministry. While introducing different methods applied for joint exploitation of common fields, this study consider the possibility of unitization between Iran and its neighboring countries. For this purpose, Iraq is considered as a best choice for cooperation in exploitation of common oil fields among Iran's neighbors. The negotiation of share and production plan is modeled as a bargaining problem which is solved by using Nash solution and concludes that whenever the profits gained by competitive exploitation of the commom field is the same for both parties, they will equally share the profit in unitization. JEL Classification: Q34, Q39, C71 Keywords: Strategies for developing common fields, Common Fields, Bargaining