Technical service contracts Iraq key clauses now play a central role in how companies plan and manage upstream oil and gas projects. Contractors, suppliers, and operators must understand these clauses clearly before they commit to long-term TSC arrangements in Iraq. This legal guide highlights the main technical service contracts Iraq key clauses that companies should review carefully under the current framework.
What Is a Technical Service Contract (TSC)?
Iraq uses the Technical Service Contract (TSC) model for many upstream oil and gas projects. Under this model, the state keeps ownership of the hydrocarbons, while the contractor provides technical services in return for a remuneration fee linked to performance and production targets.
Because TSCs operate over long periods and involve major investments, the way parties draft and negotiate the key clauses has a direct impact on legal risk, commercial returns, and the stability of the project.
Key Clauses in Iraq’s Technical Service Contracts
The following sections outline some of the technical service contracts Iraq key clauses that contractors, subcontractors and operators should examine before they sign or extend a TSC.
1. Scope of Work and Performance Obligations
The scope of work defines what the contractor must do and how the operator will measure performance. A clear scope normally:
- Lists the services and technical activities the contractor will deliver;
- Sets production targets and minimum performance thresholds where relevant;
- States the technical standards and specifications the parties will follow;
- Describes the reporting, documentation and data the contractor must submit; and
- Explains the inspection, testing and acceptance procedures the operator will apply.
When the scope of work remains vague or incomplete, the parties often disagree later about whether certain activities fall inside or outside the original contract, whether additional work requires extra payment, and whether the contractor has met its performance obligations.
2. Risk Allocation, Liability and Indemnity
Another group of technical service contracts Iraq key clauses deals with risk allocation, liability and indemnity. In practice, these provisions decide who carries which risk and to what extent. Parties should look closely at:
- Indemnity and hold harmless clauses that require one party to protect the other from specific losses or claims;
- Provisions that allocate responsibility for damage to facilities, equipment, the environment or third parties;
- Insurance clauses that set minimum coverage levels, types of insurance and evidence of policies; and
- Any limitation of liability or exclusion of certain categories of loss, such as consequential loss or loss of profit.
Force Majeure provisions also deserve careful attention. They explain when an event outside the parties’ control, such as war, sanctions, natural disasters or major accidents, allows one or both parties to suspend performance, extend deadlines or adjust their obligations.
3. Remuneration, Variations and Termination
The commercial strength of a TSC often depends on how the contract structures remuneration, variations and termination rights. Key elements include:
- The remuneration fee mechanism, including how the parties calculate, invoice and pay the fee;
- Any caps, adjustments or performance-linked components that may increase or reduce the contractor’s return;
- The procedure for variations and change orders when the operator changes the scope of work or project design; and
- Clear rules on suspension and termination, including termination for convenience, termination for default and the consequences of early termination.
These clauses influence whether the project remains financially viable for the contractor, how the parties handle extra work or delays, and what each party can claim if the relationship ends earlier than expected.
Why These Clauses Matter for Contractors and Operators
Technical Service Contracts shape operational and financial realities for many years. The way the parties draft scope, risk and remuneration clauses can affect:
- Project cash flow, cost recovery and return on investment;
- Exposure to penalties, damages and claims from third parties;
- Compliance with Iraqi regulatory expectations and contractual commitments;
- Management of subcontractors and coordination with other service providers; and
- The long-term relationship between the contractor, operator and state entity.
A focused review of the technical service contracts Iraq key clauses helps companies understand their real exposure, avoid surprises during execution, and reduce the risk of disputes.
How Horizon Law Firm Can Help
Horizon Law Firm supports contractors, suppliers and operators who work under Iraq’s TSC framework. Our team:
- Reviews key TSC clauses and explains their legal and commercial impact in clear language;
- Advises on remuneration structures, performance targets and change management mechanisms;
- Assists clients in negotiating or amending TSC terms to balance risk and reward;
- Guides clients on compliance with Iraqi contractual and regulatory requirements; and
- Helps design strategies to prevent disputes or manage them effectively if they arise.
We aim to give our clients a complete view of their position under technical service contracts in Iraq and to protect both their legal rights and commercial objectives.
Contact Us
If your company plans to enter into, renegotiate or extend a Technical Service Contract in Iraq and requires legal support, Horizon Law Firm is ready to help.
Horizon Law Firm
Corporate • Oil & Gas • Contracts & Litigation
Baghdad, Iraq
www.thehorizonlaw.com
Frequently Asked Questions (FAQ)
What is a Technical Service Contract (TSC) in Iraq?
A Technical Service Contract is a model Iraq uses in the upstream oil and gas sector. The state keeps ownership of hydrocarbons, while the contractor provides technical services in return for a remuneration fee calculated under agreed performance and production criteria.
Why do TSC clauses matter for contractors?
Key clauses in TSCs define the contractor’s scope of work, risk allocation, remuneration and termination rights. These clauses directly influence the contractor’s legal exposure, commercial return and ability to manage operational risk throughout the life of the project.
Can Horizon Law Firm assist with TSC review and negotiation?
Yes. Horizon Law Firm reviews TSC documents, explains the technical service contracts Iraq key clauses, and supports clients in negotiations, amendments and compliance with Iraqi regulatory and contractual requirements.
