Ancillary Legal Risks in Oil Services Contracts (From Perspective of Russia and Central Asia)

Abstract

Risk assessment plays a significant role in negotiation and drafting of oil services contracts. There are diverse types of such risks which may occur during production process or compliance with legal regulation adopted in the states where the Contractor has its residence and where it delivers goods or provides services. The Contractor should be aware of sanctions, anticorruption policy and mandatory rules of public law governing taxation, currency control and administrative offences. Although these issues have ancillary character in terms of provision of oil services they should be considered by the parties during negotiations as there are several tactics to address them in contracts. This article will demonstrate how it is important to choose the correct wording in drafting relevant clauses if the Contractor is going to deliver goods and/or provide services in Russia or Central Asia.