Navigating the UAE Oil and Gas Regulatory Framework

The UAE holds roughly 6% of global proven oil reserves and ranks among the world's top oil producers. For businesses entering this market, whether as upstream concessionaires, downstream traders, or service contractors, understanding the regulatory landscape is essential.

The challenge is that no single federal law governs the UAE's oil and gas sector. Instead, regulation operates across multiple layers: emirate-level upstream governance, emirate-specific trading rules, and federal environmental and safety requirements that apply everywhere.

This guide explains how these layers interact, what authorisations businesses actually need, and where legal risk typically arises.

Why UAE Oil and Gas Regulation Is Emirate-Led

Under Article 23 of the UAE Constitution, natural resources and wealth in each emirate are the public property of that emirate. This constitutional principle shapes everything about how oil and gas regulation works in practice.

There is no unified federal petroleum code. Each emirate has autonomy over its hydrocarbon resources and has established its own regulatory bodies, concession frameworks, and fiscal arrangements. The federal government, through the Ministry of Energy and Infrastructure, develops general policy but does not have direct authority over upstream licensing.

What this means for businesses:

The first question any operator or investor must answer is: which emirate are we operating in? The regulator, the licensing pathway, and the terms of participation all depend on where the asset or activity is located.

A company with operations in Abu Dhabi follows Abu Dhabi's concession framework administered by the Supreme Council for Financial and Economic Affairs. A company trading petroleum products in Dubai must comply with Dubai's petroleum trading regime under Executive Council Resolution No. 85 of 2025. A company with activities spanning multiple emirates needs to navigate multiple regulatory systems simultaneously.

Key Regulators and Decision-Makers

Abu Dhabi: The Centre of UAE Oil Production

Abu Dhabi holds approximately 96% of the UAE's proven oil reserves and accounts for almost all of the country's production. Two entities dominate regulation:

Supreme Council for Financial and Economic Affairs (SCFEA)

The SCFEA is the ultimate authority over Abu Dhabi's oil and gas policy. It awards exploration and production concessions, sets fiscal terms, and oversees strategic direction for the sector. The SCFEA's responsibilities were transferred from the former Supreme Petroleum Council, established under Abu Dhabi Law No. 1 of 1988.

Recent SCFEA activity demonstrates its central role. In 2025, the SCFEA awarded three production concession agreements to ADNOC and its partners, including concessions for Onshore Block 4 (with Japan's JODCO Exploration Limited), Offshore Block 2 (with Eni and PTTEP), and Offshore Block 5 (with Pakistan International Oil Limited). Earlier in 2025, the SCFEA awarded EOG Resources a 100% operated exploration concession for Unconventional Onshore Block 3 in the Al Dhafra region.

Abu Dhabi National Oil Company (ADNOC)

ADNOC is the state-owned company responsible for day-to-day management of oil and gas operations in Abu Dhabi. It operates across the entire hydrocarbon value chain: exploration, production, refining, distribution, and petrochemicals. ADNOC reports to the SCFEA.

Under the Abu Dhabi Gas Ownership Law (Law No. 4 of 1976), all natural gas discovered in Abu Dhabi is the sole property of the emirate. ADNOC has the exclusive right to exploit and use this gas, although it may invite investors to participate through joint agreements where ADNOC holds a minimum 51% interest.

Abu Dhabi Department of Energy (DoE)

The DoE, established under Law No. 11 of 2018, regulates the broader energy sector in Abu Dhabi. For petroleum products trading, the DoE implements Abu Dhabi Law No. 5 of 2023, which regulates the trade of petroleum products within the emirate.

Dubai: Petroleum Products Focus

Dubai's oil production is limited compared to Abu Dhabi, with reserves of approximately 2 billion barrels. The emirate's regulatory focus is primarily on downstream activities, petroleum products trading, and energy policy.

Dubai Supreme Council of Energy

The Dubai Supreme Council of Energy supervises energy policy development and coordinates the emirate's energy strategy. Under Executive Council Resolution No. 85 of 2025, the Council has comprehensive regulatory authority over petroleum trading activities including import, manufacture, storage, transport, sale, and supply.

Department of Petroleum Affairs

The Department approves licences necessary to perform oil-related activities in Dubai.

Dubai Petroleum

Dubai Petroleum, a government-owned entity, manages Dubai's offshore petroleum assets. It took over the concession previously operated by ConocoPhillips, which included the Fateh field.

Sharjah, Ras Al Khaimah, and Other Emirates

Sharjah

The Sharjah Petroleum Council (formerly the Sharjah Energy Council) grants rights to explore for and produce oil and gas in the emirate. The Sharjah National Oil Corporation (SNOC) participates in concessions on behalf of the government and operates the Sajaa assets.

Ras Al Khaimah

RAK Law No. 4 of 2018 established the RAK Petroleum Authority as the regulator for the emirate's petroleum sector. The Authority manages exploration, development, production, and commercial utilisation of petroleum resources. RAK Gas and RAK Oil Services are government-owned companies with upstream gas interests.

Federal Overlay

While upstream rights are emirate-specific, several federal laws apply across all emirates:

The Ministry of Energy and Infrastructure develops federal policy, while the Ministry of Climate Change and Environment oversees environmental compliance. In practice, local emirate environmental departments handle day-to-day approvals and enforcement.

Upstream Rights and Concessions

How Concessions Work in Abu Dhabi

Traditionally, concessions in Abu Dhabi were awarded through bilateral negotiations or closed tenders. This changed in 2018 when Abu Dhabi launched its first open and competitive bid round for exploration, development, and production rights. A second bid round concluded in 2021.

The typical Abu Dhabi concession structure includes:

Exploration phase

Recent exploration concessions give the concessionaire 100% participating rights during the exploration phase. ADNOC has the option to acquire a 60% participating interest if the project moves to development and production.

For example, EOG Resources' 2025 award for Unconventional Onshore Block 3 gives EOG 100% equity and operatorship during the three-year appraisal phase. Following appraisal, EOG may enter into a production concession in which ADNOC has the option to participate.

Production phase

Recent oil concessions in Abu Dhabi typically provide for a production period of 35 years. Unconventional gas concessions have included terms of up to 40 years for development and production following a seven-year exploration and appraisal phase.

Participating interests

ADNOC typically holds a 60% interest in production concessions, with international partners holding the remaining 40%. The June 2025 concession awards followed this pattern: ADNOC retained 60% in each of the three blocks awarded, with partners (JEL, Eni, PTTEP, PIOL) holding 28% to 40%.

Gas rights

The Abu Dhabi Gas Ownership Law restricts private exploitation of natural gas. ADNOC must hold at least 51% in any joint agreement involving gas. For gas-focused concessions like Offshore Block 2 (west of the Ghasha field), ADNOC's 60% interest reflects this requirement.

Fiscal terms

The Abu Dhabi Tax Decree No. 1 of 1965 applies to oil producers, but fiscal obligations are ultimately determined by the SCFEA and set out in each concession agreement. The UAE's 9% corporate income tax does not apply to businesses engaged in extraction of natural resources.

Concession Requirements and Reporting

Under Abu Dhabi Law No. 8 of 1978 (Petroleum Resources Conservation Law), operators must:

• Submit monthly production reports for each producing well, including daily production rates, oil-gas ratios, wellhead pressure, sediment and water content, and API gravity
• Conduct studies on reservoir behaviour
• Perform supplementary oil recovery operations (gas, water, or steam injection) if technically and economically justified
• Obtain prior consent from the regulatory authority for recovery enhancement activities
• Submit abandonment notifications before ceasing operations

The SCFEA and ADNOC retain inspection rights and can require access to any documents related to petroleum operations.

Trading, Storage, and Supply of Petroleum Products

Federal Law No. 14 of 2017: The Baseline Framework

Federal Law No. 14 of 2017 on Trading in Petroleum Products establishes the licensing framework for anyone involved in downstream petroleum activities. The law applies across the entire UAE, including free zones, special development zones, and investment zones, unless specifically exempted by Cabinet decision.

Scope of "trading"

The law defines trading broadly to include:

• Import of petroleum products
• Storage and warehousing
• Transport (land, sea, or air)
• Distribution and supply
• Sale and marketing
• Manufacturing and blending

Crude oil is specifically excluded from the law's scope. The focus is on petroleum derivatives: gasoline (benzene), kerosene, diesel (gas oil), fuel oil, base oils, lubricants, bitumen (tar), liquefied petroleum gas (LPG), and biofuels.

Licensing requirements

No natural or legal person may trade petroleum products in the UAE without authorisation. The process involves:

1. Obtaining a Trading Permit from the competent authority in the relevant emirate
2. Receiving a licence based on the Trading Permit
3. Registration in the Petroleum Trading Register maintained by the Ministry of Energy and Infrastructure

The Trading Permit specifies which petroleum products the licensee may trade and the location where trading activities may occur. Each emirate may add conditions beyond the federal baseline.

Cabinet Resolution No. 35 of 2019

The Executive Regulations supplement Federal Law 14/2017 with specific implementation guidelines. Key requirements include:

• Registration in the Ministry's register within 10 working days of obtaining the Trading Permit
• Formation of a Petroleum Products Trading Regulatory Committee in each emirate (minimum seven members including representatives from the Ministry, Ministry of Interior, Federal Authority for Land and Maritime Transport, and relevant emirate entities)
• Reconciliation procedures for violations, with specified amounts ranging from AED 250,000 to AED 450,000 depending on the offence

Penalties under Federal Law 14/2017

Criminal prosecution requires a written request from the competent authority. Settlement is available before court referral for amounts up to the maximum prescribed fine.

Dubai: Executive Council Resolution No. 85 of 2025

Dubai issued its comprehensive petroleum trading framework in November 2025. The Resolution applies to all entities engaged in petroleum activities across Dubai, including special development zones and free zones (including DIFC), except for companies exempted by UAE Cabinet decision.

Key features:

The Dubai Supreme Council of Energy has full regulatory authority, including:

• Setting rules on competition and market concentration
• Approving technical standards and procedures for trading, storage, transport, sale, and use of petroleum
• Ensuring compliance with health, safety, and environmental requirements
• Issuing, renewing, and amending permits based on recommendations from the Petroleum Trading Regulation Committee
• Determining the number and locations of fuel stations in line with Dubai Urban Plan
• Designating areas where petroleum trading is prohibited

Operational requirements:

Entities operating in Dubai must:

• Register in the Petroleum Trading Register maintained by the Ministry of Energy and Infrastructure
• Trade only materials from Council-approved sources that meet technical standards
• Display prices clearly
• Follow safety and technical standards for storage, transport, and handling
• Obtain prior Council approval for any permit changes
• Report incidents within 24 hours
• Keep records of material sources for at least five years

Enforcement:

Violations incur fines up to AED 1 million, doubled for repeated offences within one year. Additional measures include:

• Permit cancellation
• Temporary facility closure (up to 6 months)
• Commercial licence revocation
• Seizure, destruction, or re-export of non-compliant petroleum materials and vehicles

Violators must remove the cause of the violation and restore conditions at their own expense. If they fail to do so, the Council may carry out the work and charge the violator plus 25% administrative costs.

Transition period:

Existing operators have one year from the effective date to comply, with a possible one-year extension subject to approval from the Chairman of the Executive Council.

Abu Dhabi: Law No. 5 of 2023

The Abu Dhabi Department of Energy implements Abu Dhabi Law No. 5 of 2023 concerning the Regulation of the Trade of Petroleum Products. This law works in conjunction with Federal Law No. 14 of 2017, with the DoE developing the emirate-level regulatory framework.

Businesses trading petroleum products in Abu Dhabi should monitor DoE announcements as the regulatory framework continues to be activated and refined.

Free Zone Considerations

A common misconception is that free zones operate outside petroleum trading regulations. This is incorrect for most emirates.

Dubai's Resolution 85/2025 explicitly applies to free zones including DIFC. Federal Law 14/2017 applies to free zones, special development zones, and investment zones unless exempted by Cabinet decision.

Companies operating in free zones that engage in petroleum-related activities (storage, distribution, logistics, trading) should not assume exemption. Verify the applicable regime for the specific free zone and emirate.

Environmental and Waste Compliance

Federal Law No. 24 of 1999: Environmental Protection

Federal Law No. 24 of 1999 on the Protection and Development of the Environment establishes the baseline for environmental compliance across all emirates. For oil and gas operations, key requirements include:

Environmental impact assessment

Any project, establishment, or activity requires an environmental licence from the competent authority. The application must include an environmental impact assessment (EIA). The authority makes a decision within one month.

The Environment Agency of Abu Dhabi (EAD) has published lists of projects requiring EIA, including fossil natural resource projects and non-fossil natural resource projects. Upstream oil and gas developments, refineries, storage facilities, and pipeline projects typically require comprehensive EIA.

Operational requirements for oil and gas

Parties licensed to prospect, extract, or exploit onshore or offshore oil and gas fields must:

• Carry out periodic monitoring of environmental impact from production field activities
• Monitor land and marine transportation routes
• Apply appropriate measures to protect the environment
• Take all necessary precautions to prevent air and water pollution
• Remedy any pollution that occurs

Article 58 requires that emissions from combustion and flaring be registered and stay within established limits.

Spill prevention and response

The law prohibits:

• Intentional disposal of pollutants or wastes from ships, aircraft, or any other means into the marine environment
• Deliberate dumping from ships or industrial installations into the marine environment
• Activities that cause damage to the environment without proper safety measures

Penalties

Breach of Article 58 (emissions and pollution from oil and gas operations) can result in imprisonment for 2 to 5 years and/or fines between AED 200,000 and AED 500,000. Double penalties apply for repeat offences.

Breach of waste disposal and pollution provisions results in fines starting at AED 5,000, with escalating penalties for serious violations.

Federal Law No. 12 of 2018: Waste Management

Federal Law No. 12 of 2018 on Integrated Waste Management regulates waste handling across several categories relevant to oil and gas operations:

Oil wastes

Defined as all oils required to be disposed from commercial, industrial, and service entities, including oils from transportation vehicles, industrial equipment, and machinery. The competent authority must:

• Follow up on collection, treatment, and recycling procedures
• Ensure oil waste is not mixed with other materials or wastes
• Submit periodic reports to the Ministry on waste type, quantities, and treatment methods

Marine wastes

Wastes resulting from vessels, oil tankers, marine operations, and land operations close to coastal areas. Port authorities must establish proper facilities to receive waste from cargo vessels and marine operators.

Hazardous wastes

Wastes from activities and operations that involve hazardous substances. The law requires segregation, treatment, and reduction under competent authority supervision.

Industrial wastes

All wastes from industrial and processing activities in industrial enterprises, whether hazardous or non-hazardous.

Cabinet Resolution No. 39 of 2021 provides the Executive Regulations, setting specific standards for wastewater treatment, pollutant concentrations, and disposal procedures.

Cabinet Resolution No. 33 of 2018: Used Oils

This resolution specifically addresses the circulation of used oils. It establishes controls on collection, storage, and handling that affect workshops, terminals, vehicle fleets, and industrial sites involved in oil and gas activities.

Service contractors operating equipment maintenance facilities, lubricant suppliers, and companies managing vehicle fleets should ensure their used oil handling procedures comply with this resolution.

Emirate-Level Environmental Regulations

Each emirate has additional environmental requirements:

Abu Dhabi

• Abu Dhabi Law No. 4 of 1999 (Protection of the Environment) sets environmental standards and permitting procedures
• Abu Dhabi Law No. 8 of 1978 (Petroleum Resources Conservation) requires operators to take all necessary precautions to prevent air and water pollution and remedy any pollution that occurs
• The Environment Agency of Abu Dhabi (EAD) issues environmental permits and conducts monitoring
• Abu Dhabi's Environment, Health and Safety Management System (EHSMS) framework applies to transport sector operations

Dubai

• Law No. 18 of 2024 regulates waste management in Dubai, including provisions prohibiting discharge of used oils onto pavements or roads and dumping waste in seawater
• The Dubai Environment and Climate Change Authority oversees enforcement

Common Legal Risks for Operators and Contractors

Risk Area 1: Multi-Emirate Operations Without Proper Licensing

Companies operating across multiple emirates often assume that a licence in one emirate covers activities in another. This is incorrect. Each emirate has its own licensing requirements for petroleum trading, and federal registration does not substitute for emirate-level permits.

Mitigation: Map all locations where petroleum-related activities occur (storage, transport, supply) and verify licensing requirements in each emirate.

Risk Area 2: Free Zone Misconceptions

Assuming free zone status provides exemption from petroleum trading regulations is a common error. Both Dubai and federal frameworks explicitly cover free zones unless a specific Cabinet exemption applies.

Mitigation: Confirm whether the free zone has an exemption. If not, ensure full compliance with the applicable emirate's petroleum trading regime.

Risk Area 3: Environmental Permit Gaps

Projects may obtain commercial licences but overlook environmental approvals. Federal Law 24/1999 requires an environmental licence before commencing any project. Operating without EIA approval exposes the company to penalties and potential project suspension.

Mitigation: Integrate environmental permitting into the project timeline from the outset. Budget sufficient time for EIA preparation and authority review.

Risk Area 4: Contractor Compliance Flow-Downs

Principal contractors are often held responsible for subcontractor non-compliance with environmental and safety requirements. Standard contracts may not adequately address this risk.

Mitigation: Include comprehensive HSE clauses in contractor agreements, require evidence of environmental licences and permits, establish audit rights, and specify indemnification for regulatory violations.

Risk Area 5: Documentation and Record-Keeping Failures

Dubai's Resolution 85/2025 requires five-year retention of petroleum source records and 24-hour incident reporting. Failure to maintain records creates evidentiary problems if disputes or investigations arise.

Mitigation: Establish robust record-keeping systems from day one. Implement incident reporting protocols that meet the 24-hour deadline.

Risk Area 6: Used Oil and Waste Handling

Oil and gas service operations generate significant volumes of used oils and wastes. Improper handling violates Federal Law 12/2018 and Cabinet Resolution 33/2018, and can result in environmental liability.

Mitigation: Establish compliant waste handling procedures, engage licensed waste management contractors, and maintain records of waste disposal.

A Practical Compliance Checklist

Stage 1: Market Entry and Structuring

• Identify your position in the value chain: upstream, midstream, downstream, or service contractor
• Determine which emirates you will operate in
• Identify where storage, transport, or supply activities will occur
• Check whether you are in a free zone and whether the relevant emirate's petroleum trading regime applies
• Assess whether the corporate structure is appropriate for the intended activities

Stage 2: Rights and Authorisations

For upstream activities:

• Engage with the relevant emirate authority (SCFEA for Abu Dhabi, Sharjah Petroleum Council, RAK Petroleum Authority, etc.)
• Understand concession terms, fiscal arrangements, and local content requirements
• Confirm gas rights restrictions (minimum 51% ADNOC participation in Abu Dhabi)

For downstream/trading activities:

• Obtain Trading Permit from the competent authority in each relevant emirate
• Register in the federal Petroleum Trading Register within 10 working days
• Confirm the specific petroleum products you are authorised to trade
• Verify compliance with emirate-specific requirements (Dubai Resolution 85/2025, Abu Dhabi Law 5/2023)

Stage 3: Environmental and Operational Compliance

• Complete environmental impact assessment if required
• Obtain environmental licence from the competent authority
• Establish emissions monitoring and reporting systems
• Implement spill prevention and response plans
• Set up waste handling procedures compliant with Federal Law 12/2018
• Ensure used oil handling meets Cabinet Resolution 33/2018 requirements
• Establish 24-hour incident reporting protocols (Dubai)
• Implement five-year record retention system for petroleum source documentation

Stage 4: Contracts and Risk Allocation

• Include compliance warranties in trading and supply agreements
• Establish audit rights for supplier and contractor compliance
• Document source and chain of custody for petroleum materials
• Include comprehensive HSE obligations in service contracts
• Address waste handling and subcontractor flow-downs
• Specify indemnification for regulatory violations
• Ensure adequate insurance coverage for environmental and operational liabilities
• Include appropriate dispute resolution mechanisms

Looking Ahead: Energy Transition and Decarbonisation

The UAE has committed to achieving net zero by 2050, and this commitment is reshaping the oil and gas sector.

ADNOC has set targets to decrease greenhouse gas intensity by 25% by 2030 and expand carbon capture, utilisation, and storage (CCUS) capacity by 500%. The company is also procuring up to 100% of its electricity from solar and nuclear sources for its operations.

The UAE's Hydrogen Leadership Roadmap targets 25% of the global low-carbon hydrogen market by 2030. ADNOC and its partners are investing in hydrogen production capacity.

For operators and investors, these developments create both compliance obligations (as decarbonisation requirements are incorporated into concessions and permits) and commercial opportunities (in carbon capture, hydrogen, and renewable energy integration).

Federal Decree-Law No. 11 of 2024 on the Reduction of Climate Change Effects establishes the legal framework for climate action. Companies in the oil and gas sector should monitor implementing regulations as they are issued.

Frequently Asked Questions

Who regulates oil and gas in the UAE?

There is no single federal regulator. Each emirate has its own regulatory body: the Supreme Council for Financial and Economic Affairs (SCFEA) and ADNOC in Abu Dhabi, the Dubai Supreme Council of Energy in Dubai, the Sharjah Petroleum Council in Sharjah, and the RAK Petroleum Authority in Ras Al Khaimah. Federal laws on environment, waste, and petroleum products trading apply across all emirates.

Are oil and gas rules the same in all emirates?

No. While federal laws provide a baseline (environment, waste, petroleum trading), each emirate has distinct upstream governance, concession frameworks, and local requirements. Abu Dhabi has the most developed oil and gas regulatory system, reflecting its dominant share of UAE reserves.

Do Dubai petroleum trading rules apply in free zones?

Yes. Executive Council Resolution No. 85 of 2025 explicitly applies to all entities across Dubai, including special development zones and free zones (including DIFC), except for companies exempted by UAE Cabinet decision.

When does a business need authorisation to trade petroleum products?

Any entity involved in the import, distribution, transport, sale, storage, or supply of petroleum products requires a Trading Permit from the competent authority in the relevant emirate. This applies to benzene (gasoline), kerosene, diesel, fuel oil, lubricants, LPG, and other petroleum derivatives. Crude oil is excluded.

What environmental laws affect oil and gas operations in the UAE?

Federal Law No. 24 of 1999 on Protection and Development of the Environment is the primary legislation. It requires environmental impact assessment for projects, emissions monitoring and limits, spill prevention measures, and pollution controls. Federal Law No. 12 of 2018 on Integrated Waste Management governs oil waste, marine waste, and hazardous waste handling.

What are the key compliance clauses to include in supply and transport contracts?

Contracts should address: compliance warranties covering licensing, environmental permits, and safety standards; audit rights for regulatory compliance verification; documentation requirements for petroleum source and chain of custody; HSE obligations with subcontractor flow-downs; incident reporting obligations; indemnification for regulatory violations; and insurance requirements.

How are upstream rights typically granted in Abu Dhabi?

Rights are granted by concession agreement signed by the SCFEA and ADNOC. Since 2018, Abu Dhabi has used open competitive bid rounds. Exploration concessions may give the concessionaire 100% participating rights during exploration, with ADNOC having an option to acquire 60% at the development and production stage. Production concessions typically have 35-year terms. Gas projects require minimum 51% ADNOC participation.

What documentation should companies keep for petroleum materials sources in Dubai?

Under Resolution 85/2025, entities must keep records of material sources for at least five years. This includes documentation confirming acquisition from Council-approved companies, verification of source, and chain of custody records. Failure to maintain records can result in fines up to AED 1 million.

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