The condition of the oil and gas sector is characterized by the complication of geological settings, and there is more competition in energy markets due to the current trend towards decarbonization. These circumstances require oil and gas companies to become more flexible and improve their project economic feasibility studies. The purpose of the research was to develop a methodological approach for the economic evaluation of oil and gas projects that includes choosing and substantiating the choice of engineering solutions that can be used to make decisions on subsequent investing. A comparative analysis of various economic evaluation methods applied to oil and gas projects included the DCF model, DPNV model with modifications, binary discounting, and reverse discounting. Taking into account the specific features of oil and gas projects, the authors provide a rationale for using a risk-free rate to calculate project outflows and a combination of reverse rates to calculate inflows. In addition, the theory of real options was applied to assess and account for geological and technical risks. These risks cause changes in the production rate when making engineering decisions. Using the proposed methodological approach, oil and gas companies will be able to evaluate in more detail and explain the influence of engineering solutions on the net present value of the project. This is the result of better consideration of geological and technical risks. The proposed approach is relevant both before project implementation and during production.

This article is devoted to the examination of models and the selection of optimal parameters for concession agreements pertaining to construction and operation projects within the pipeline infrastructure of the petrochemical sector. Pipelines are underscored as capital-intensive assets crucial for the organization of complex petrochemical production processes. These processes play a vital role in generating added value, tax revenue, employment opportunities, and fostering territorial development while upholding environmental quality standards. This study aims to ascertain the economic parameters of concession agreements, with a focus on achieving a balance of economic interests between the government and businesses. Through a comparative analysis of fundamental economic and mathematical models of concession agreements, the authors model economic parameters to determine the government’s share in investments and concession fees concerning pipeline projects. Subsequently, an oil product pipeline project is discussed as a case study. The results gleaned from this analysis can be harnessed to optimize the parameters of concession agreements and enhance the economic efficiency of project implementation. Economically viable parameters not only facilitate the execution of concession agreements but also foster the generation of added value, social benefits, and environmental oversight, thus aligning with the principles of sustainable development.

This article presents the value-added production-sharing contract (VAPSC), an extension of traditional production-sharing contracts (PSCs), which encompasses raw materials production, subsequent processing, and the final ‘sharing’ of goods. Developing countries often face challenges in oil and gas exploration, production, and sector development, necessitating new collaborative frameworks between governments, industries, and international companies. The study justifies the economic terms of VAPSC that align with Lebanon’s national regulations, focusing on offshore gas production and the subsequent production and sale of liquefied natural gas (LNG). The research evaluates VAPSC application in Lebanon through a case study involving offshore gas field development, LNG plant construction, and consequent LNG-sharing. Results demonstrate the VAPSC potential to promote petroleum sector development by generating added value for both the state and society, as well as economic efficiency for the contractor. The research contributes to contract theory by introducing VAPSC as a novel framework for integrating hydrocarbon extraction, subsequent processing, and value-added product distribution, offering a replicable model for other resource-rich developing nations. The main findings include the design of a new type of contract—VAPSC—along with an economic-mathematical model for optimizing government-investor partnerships and the definition of key contractual terms.