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Monday, September 25, 2017
Analytical techniques to understand the financial regime of trade agreements, financing, investment and oil/petroleum contracts

Preamble:
Assuming the stability of the variables and side factors, affecting the cash flows of a project at the time of reviewing the financial régime of each contracts, it (, either in its simplistic or its complex form, as commonly used in different contract types such as E,E&P,EPC,F ,EPC&F,EPCF,.. BOT, BLT… PSA, BUYBACK...) can be considered as a main factor in determining the nominated profit or loss, remuneration fee ,Price, return on investment,…therefore ,Understanding the financial regime of a contract is a vital action to analyze all respective risks on an investment and then calculating its profits and return.

Role of words and vocabulary
 In various contracts whether simple or complex, words, idioms and multiple phrases are used along with the identified terms and provisions.
Any word or phrase may imply an economic and financial sense. Likewise, any condition or adverb used in a contract may
-          limit the meaning and the concept of a word or a phrase
-          make  a commitment and or an obligation for each party
-          lead each party to accept or reject the occurrence of an event during a specified period
-          provide the basis for specific measures or indicators
-          prohibit or produce a value or a benefit for each party
-          create risk or different hazards
-          allow any party to fraud and abuse in different ways
-          encounter the execution of the contract with several obstacles
-          cause a variety claims on the contract performance quality, any party's (contractual) rights, approving or rejecting some items of the incurred capital expenditures and the recovery mechanism of them and many other cases of this kind
-          reinforce or override the other constraints or conditions and …


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