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Regulatory overview

Regulation

What are the primary laws and regulations governing the oil and gas industry in your jurisdiction?

The United Arab Emirates consists of a federation of seven emirates (ie, Abu Dhabi, Dubai, Sharjah, Ras Al Khaimah, Ajman, Umm Al Quwain and Fujairah). The Federal Constitution apportions powers between the Federal Authorities and each emirate. The federal authorities of the United Arab Emirates (ie, the Federal Supreme Council, the president and vice president, the Cabinet, the Federal National Council and the Federal Judicial Authority) are responsible for matters such as foreign affairs, defence, education and public health. The emirates have jurisdiction over all matters not assigned to the federation, including natural resources.

Article 23 of the UAE Constitution deems natural resources (including oil and gas) in each emirate to be the public property of that emirate. Therefore, the industry is subject to a variety of legislation, including:

  • Federal Law No 14 of 2017 on Trading in Petroleum Products (regulating the trade of petroleum products);
  • Federal Decree Law No 8 of 2017 on Value Added Tax (imposing value added tax at a rate of 5% on taxable supplies of goods and services);
  • the Abu Dhabi Tax Decree 1965;
  • Abu Dhabi Law No 7 of 1971 (establishing Abu Dhabi National Oil Company (ADNOC));
  • Abu Dhabi Law No 2 of 1973 (regulating petroleum ports);
  • Abu Dhabi Law No 4 of 1976 (on gas ownership);
  • Abu Dhabi Law No 4 of 1976 (a gas ownership law entitling ADNOC to exploit Abu Dhabi's gas resources through joint agreement and projects undertaken with third parties);
  • Abu Dhabi Law No 8 of 1978 (in relation to conservation of petroleum resources);
  • Abu Dhabi Law No 1 of 1988 (establishing the Supreme Petroleum Council); and
  • Dubai Law No 19 of 2009 (establishing the Dubai Supreme Council of Energy).

The United Arab Emirates is also party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and various other bilateral investment treaties with other countries.

What government bodies are charged with regulating the oil and gas industry and what are the extent of their powers?

The energy sector is federally regulated by the UAE Ministry of Energy and Industry, which develops policies and legislation to achieve secure, sustainable and competitive energy supply in the United Arab Emirates.

However, the oil and gas resources of each emirate are more specifically regulated therein:

  • In Abu Dhabi, the Supreme Petroleum Council creates and oversees the implementation of general and fiscal policy in relation to domestic oil and gas resources. The council also functions as ADNOC's board of directors.
  • In Dubai, the Dubai Supreme Council of Energy is responsible for policy development with a view to developing new energy sources.
  • In Sharjah, the Petroleum Council of Sharjah is responsible for regulating the oil and gas industry and granting concessions.

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