Investment in upstream oil and gas operations is of great importance for the exploration and development of oil and gas fields. There are diverse and varied laws and regulations regarding investment in upstream oil and gas operations. This article intends to investigate and evaluate these various laws, as well as to provide an answer to the question as to what extent these rules are able to provide a secure legal framework for foreign investment in upstream oil activities. In this article we first prove that from a legal point of view foreign investment in oil and gas upstream activities has not been very explicitly permitted. Secondly, the basic terms and conditions of upstream oil and gas contracts, through which investments can be materialized in the oil and gas sector, have not yet been touched by regulations. And thirdly, it is still unclear which body is responsible for defining these essential terms and conditions: whether it is the Council of Ministers, the Economic Council or there is no legal body at all to legalize these terms and conditions and they are left to the Ministry of Petroleum and the National Iranian Oil Company (NIOC) itself to set these terms and conditions within the broad framework of the legislation