Over the past decades, the Engineering, Procurement, and Construction (EPC) model has dominated service contracts in Iran’s oil and gas industry. Originally designed for downstream, construction-oriented projects with limited uncertainty, EPC contracts have been applied even in complex, long-term upstream projects, mainly to ensure cost and schedule control. However, the inherent characteristics of oil and gas projects—such as technical complexity, environmental and economic uncertainties, extended asset lifecycles, and the need for continuous production over 15–20 years—indicate that EPC’s construction-only approach is inadequate to guarantee sustainable and economical performance.
The Design–Build–Operate (DBO) model addresses these limitations by integrating operational responsibilities with design and construction. In this model, the contractor is not only responsible for delivering assets but also contractually bound to achieve operational results. This commitment shapes engineering decisions, technology choices, maintenance strategies, and operational conduct from the outset. Focusing on this distinct feature, the present paper analyzes DBO contract in three dimensions: the necessity of incorporating the operation phase, the contractor’s obligations to maintain performance, and the employer’s oversight of operational quality.
Findings indicate that the DBO model—through performance indicators, continuous reporting, independent audits, and data-driven monitoring—enables real-time control and prompt correction of deficiencies. Thus, the contract evolves from equipment delivery to performance assurance. However, the model’s success depends on prerequisites such as clearly defined indicators, transparent oversight, and tailored incentives and guarantees. These must be thoroughly addressed before applying this model to oil and gas projects.