Performance of obligations stemming from a contract on oil processing under Russian law

Abstract

The paper examines relations related to the processing of “tolling oil raw materials” into petroleum products (“processing”) and identifies peculiarities of performance of the relevant obligation. This kind of contract, which formalizes oil refining, is the most common in the oil sector of the fuel and energy complex of Russia. Its prevalence is due to the will of oil owners, among whom vertically integrated companies dominate, to retain ownership of commercial oil and petroleum products obtained as a result of processing. The research aim is to examine the nature of “processing”, including analysing the peculiarities of performing the obligation to refine oil. It is justified that the “processing” contract is a mixed contract that contains elements of a works contract and a contract for the provision of paid services. In the course of performing the oil refining obligation, the principles of due and good faith performance are implemented. Their implementation is influenced by the existing legal norms, as well as the technological characteristics of oil refining that affect the interaction of parties and terms of agreements. There is a lack of detailed regulation of civil law relations developing in the oil sector of the Russian economy, including “processing”. The development of a stand-alone federal law could contribute to the streamlining and clarification of special legal rules that would properly govern the relations of the parties.

References

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