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Author: Arshadh Malim
The Natural Resources & Energy (NRE) sector remains at the centre of the United Arab Emirates’ long-term economic strategy. While the country continues to invest in clean-energy initiatives, Abu Dhabi’s hydrocarbons industry remains fundamental to national growth. This is most visible in the long-term concession arrangements granted by the Supreme Council for Financial and Economic Affairs (SCFEA) and implemented through the Abu Dhabi National Oil Company (ADNOC) in collaboration with leading international and regional partners.
For investors, lenders and governments, the concession agreement is the core legal instrument that defines who may explore, develop and produce hydrocarbons, on what terms, and under which regulatory, operational and commercial obligations. Structuring these agreements to reflect an evolving legal and policy landscape, while supporting cross-border investment and operational certainty, requires careful legal analysis and sector-specific expertise.
1. The legal architecture underpinning ADNOC concessions
Abu Dhabi’s upstream regime is grounded in the constitutional principle that ownership of oil and gas resources rests with the Emirate. Rights to explore and produce hydrocarbons are granted through concession agreements. This framework is established through key legislation, including:
- Abu Dhabi Law No. 4 of 1976 on the Emirate’s ownership of gas
- Abu Dhabi Law No. 8 of 1978 on the preservation and conservation of oil resources
- Laws establishing ADNOC and regulating the former Supreme Petroleum Council, now the SCFEA
Collectively, these instruments empower ADNOC to develop and manage Abu Dhabi’s oil and gas resources, either independently or jointly with international oil companies (IOCs) and national oil companies (NOCs).
How concession awards work in practice
Concession rights are granted by the SCFEA to ADNOC and a consortium of regional and international partners. Recent concessions typically feature:
- Foreign participants jointly holding up to approximately 40%
- ADNOC retaining the remaining majority interest, often at least 60% during production
- Bespoke, heavily negotiated terms rather than reliance on a model form
A concession agreement generally addresses:
- The grant of rights over a defined block or field
- Fiscal terms, including royalties, cost recovery and profit sharing
- Lifting rights and export entitlements
- Technical, operational and HSE requirements
- Relinquishment, decommissioning and dispute-resolution mechanisms
Increasingly, agreements incorporate In-Country Value (ICV), technology-transfer arrangements and decarbonisation expectations.
2. Cross-border and PPP-style dimensions
Contemporary concession arrangements operate at the intersection of domestic law, international regulatory requirements and cross-border commercial considerations. They typically involve:
- UAE federal and Abu Dhabi laws governing oil and gas, environmental protection, HSE, corporate regulation and taxation
- Bilateral investment treaties, double taxation agreements and the law of the sea for offshore concessions
- Foreign-partner obligations such as sanctions compliance, anti-bribery rules and ESG reporting
- Project-finance considerations, including bankability, lender step-in rights, security structures and revenue transparency
As regional NOCs increase monetisation of midstream and pipeline infrastructure, concession frameworks often interface with PPP-style structures and capital-markets arrangements that require enhanced contractual clarity and regulatory alignment.
3. How BDO Legal supports concession arrangements
BDO UAE’s Natural Resources & Energy (NRE) practice advises clients throughout the concession life cycle. Our work focuses on providing clear, practical and legally robust guidance in a sector where regulatory expectations and commercial priorities continue to evolve. Support typically includes:
Structuring concession frameworks and joint operating relationships
Developing concession, joint venture and operating arrangements that align with Abu Dhabi’s regulatory framework while addressing the commercial priorities of participating entities.
Rights, obligations and risk allocation
Analysing concession terms to ensure clarity around cost recovery, lifting rights, liability exposure and operational responsibilities across exploration, development and production phases.
Regulatory and compliance alignment
Integrating UAE regulatory requirements - including ICV, HSE standards, environmental laws, data governance, cybersecurity and sanctions compliance - into concession documentation and operational processes.
Operational governance and interface with state entities
Advising on decision-making structures, reporting frameworks and governance mechanisms that support effective coordination between concessionaires, operators and government bodies.
Energy transition and decarbonisation considerations
Embedding emissions-management, methane controls, flaring requirements and, where applicable, CCUS-related obligations into long-term concession arrangements.
Integration with financing and infrastructure arrangements
Assessing contractual and regulatory implications where concession assets interface with midstream infrastructure or project-finance structures, including security arrangements and lender rights.
Conclusion
As Abu Dhabi advances both hydrocarbon development and its wider energy-transition agenda, concession agreements remain central to how resources are allocated and managed. A sound understanding of the legal framework, policy drivers and commercial implications is essential for organisations operating within the UAE’s NRE landscape.
For organisations seeking further clarity on specific aspects of the concession regime or how these developments may relate to ongoing or planned activities, tailored guidance can support strategic decision-making.
Note: This Legal Update / Newsletter is intended for general informational purposes only and should not be construed as legal advice. It is based on laws and legal interpretations in effect as of the date of publication. Laws and regulations may change over time, and their application can vary depending on individual circumstances. Readers are strongly encouraged to seek specific legal counsel before acting on any of the information provided herein.