Legal Issues of Execution of Export and Import Commercial Contracts for Cross-Border Transportation of Hydrocarbons in the Arctic Taking into Account the Sanctions Factor

Abstract

The paper discusses the problems of execution of contracts for exploration, oil production, and transportation of hydrocarbons in the Arctic amid enormous sanctions pressure that the oil and gas industry is experiencing today. The aper demonstrates the impact of blocking restrictions, which negatively affected export and import contracts. Recent international agreements have been in a particularly vulnerable position. Emerging risks can shake the debt sustainability of a transaction. Their alienation immediately reveals commercial risks. A transaction made in favor of a creditor, as it seems, should burden such risks. However, it is not easy to determine the forecast values of expenses from the acquisition, assignment of rights to oil production, transportation of refined products due to debt repayment. There is an opportunity to take advantage of industry and corporate import substitution plans, especially in the field of crude oil exports, thereby resisting these risks. Meanwhile, the system of business and legal norms still constitutes a vast field of risks. They change in time, in space, due to price regulation, but also against the background of traditional law enforcement – the search for beneficial owners. Sectoral restrictions already imply facilitation of institutional risk. The author applies a systematic approach – from particular cases of manifestation (of risks), whether they are uncompensated costs as part of the network infrastructure and to a causal relationship with derivatives, non-revolving financial instruments. It is noted how difficult it is then to execute settlement forward contracts if the limits of price fluctuations for these contracts are exceeded many times. The importance of restorative requirements, mandatory in this regard, is emphasized. Russia’s response to the sanctions is to deepen reorientation of hydrocarbon flows from the West to the East. This explains generalization of the role of the Northern Sea Route, based on the assessment of available resources, plans for the re-equipment of ports according to their specialization and depending on the requests of different levels of consumers.