One of the most strategic sectors in the UAE is the Oil & Gas Market. It is an important contributor to the national economy of the UAE. A broad variety of support systems are needed for the oil and gas industry, ranging from infrastructure, oil fields, oil rigs, storage, transport, labour, and more.
Oil and Gas Sector in Abu Dhabi
Abu Dhabi is one of the world’s major sources of energy. The Abu Dhabi National Oil Company (ADNOC) is an energy provider in Abu Dhabi. It has a network of 18 businesses spanning exploration, processing, storage, manufacturing, distribution and growth of petrochemicals through the hydrocarbon value chain. Its mission is to find different and creative ways to increase the benefit of the natural resources of the Emirate. In addition, to ensure that it meets the demands of the evolving energy sector, it explores pioneering methods and innovations.
Opportunities in the Oil and Gas Sector in Abu Dhabi
In Abu Dhabi’s Al Dhafra area, ADNOC has announced that it would invest about $45 billion in expanding its Ruwais petrochemical complex. This will make it the world’s biggest integrated complex of refineries and petrochemicals. The selection of ADNOC’s petrochemical and derived goods would also be expanded. Abu Dhabi has a fresh licensing plan for blocks. The first-ever open bid round for new licensing opportunities for oil and gas discovery, growth and production in the Emirate has been initiated by ADNOC. Six blocks – two offshore and four onshore – have been announced. It shows the ability and benefits. In Abu Dhabi, should your company be doing business? If so, how can one start the oil and gas business in Abu Dhabi?
Setting up an Oil & Gas Company in Abu Dhabi
There are few rules from different government agencies regulating the Oil and Gas Business Setup in the UAE. To start any activities, the Supreme Petroleum Council has to authorize the venture.
Steps in Setting up in Oil & gas Company in Abu Dhabi
- Initial consultation to understand the planned activities and to determine the legal structure
- Preparation of legal documents
- Application for Trade Name approval
- Arrangement of commercial lease
- Notarization of Memorandum of Association or Service Agent Agreement
- Application for Supreme Petroleum Council approval and Commercial License Issue
- Opening of corporate bank account
- Registration with the General Directorate of Residency and Foreign Affairs (GDRFA) and Ministry of Human Resources and Emiratization (MOHRE) to be able to provide visas for employees.
- Register the company with labour and immigration
Registering with the Supreme Petroleum Council
Abu Dhabi’s petroleum sector is the responsibility of the Supreme Petroleum Board. Supreme Petroleum Council permission would be needed for any business working in oil and gas and wishing to register with ADNOC for the provision of products or services. This approval is not only for companies that provide drilling, tank washing, and pipeline maintenance; it is also mandatory for companies that provide ancillary products and services such as pumps and valves, medical equipment, and consulting services.
It is proposed that during their incorporation period, corporations should apply for Supreme Petroleum Council approval. In addition to those produced for the business setup, the work IDs of the local supporter or service agent would be the only documents needed. The application is sent via the Economic Development Department of Abu Dhabi (ADDED) and approval is normally obtained within 24-48 hours. A premium for its acceptance is not paid by the Supreme Petroleum Board. Beware, though, as certain organizations may seek to charge huge fees to arrange this permission.
Activities Requiring Special Approvals
Business Activities requiring Special approval from Supreme Petroleum Council
- Employee Catering
- Equipment Trading
- And allied Oil & Gas related activities
Including an additional ‘Onshore and Offshore Oil & Gas Field & Facilities Services’ operation, all such enterprises must obtain a trade license. There is a more unique order for permission from the Essential Infrastructure and Coastal Protection Authority for businesses to enter the oil field (CICPA).
Where to Set Up Your Business in Abu Dhabi- On Shore or Free Zone?
Supreme Petroleum Council permission would be needed for oil and gas firms wishing to operate directly with the ADNOC. Although this permission is possible via the Masdar free zone, there are more requirements and fees required. As such, either as a Limited Liability Corporation or a Foreign Branch Office, oil and gas firms usually set up onshore. Generally speaking, it is not necessary to secure Supreme Petroleum Council permission for free zone corporations.
For international investors wishing to set up an onshore oil and gas company in Abu Dhabi, the primary complexity is the need to find a local partner. As in other countries in the GCC, UAE law notes that more than 49 percent of every business enterprise in Abu Dhabi should not be controlled by a foreign individual, and therefore at least one Emirati associate or UAE Owned Firm must be a business shareholder of at least 51 percent stake. Riz and Mona Consultancy will serve as the corporate local partner to the foreign investor as a business creation expert, ensuring security and removing the need to source an actual Emirati stakeholder.
We Are Here for You
It requires a lot of preparation and hard work to set up a big project like that of a petroleum corporation, and you obviously need the right kind of funding, particularly during the initial but critical stage of business registration and setup. To get your venture underway in Abu Dhabi and elsewhere in the UAE, contact us to collaborate with the right professionals.