Abu Dhabi, the largest Emirate in the UAE, is one of the most influential oil-producing regions in the world. Given the strategic location, world-class infrastructure, and business-friendly policies, it is an ideal location for starting an oil and gas business.
Since the discovery of oil and gas, the Abu Dhabi energy sector is growing enormously and it continues to attract companies. If you are planning to set up an oil and gas company in Abu Dhabi, understanding the involved process and legal frameworks is necessary. In this article, we take a look at how to start an oil and gas company in Abu Dhabi.
Back to topWhy Choose to Setup an Oil and Gas Company in Abu Dhabi?
Apart from the fact that the UAE has vast reserves of oil and natural gas, there are other reasons for considering business setup in Abu Dhabi. Let us look at why it is a sought after destination for entrepreneurs from across the world:
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Availability of Resources
Abu Dhabi accounts for over 90 percent of UAE’s oil production. Given this, it offers opportunities for oil and gas companies to engage in activities like exploration, extraction, refining, and distribution of natural resources like oil and gas.
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Strategic Location
The Emirate’s location offers entrepreneurs access to key trading routes via road, air, and sea. The trade routes enable the companies to access major markets and cater to new consumers.
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Business-Friendly Environment
Abu Dhabi’s friendly business environment is another reason for entrepreneurs preferring to start an oil and gas company in the Emirate. Tax incentives, low operational costs, and good foreign investment policies draw them towards Abu Dhabi’s energy sector.
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Strong Legal Framework
UAE’s oil and gas industry is governed by a stable legal and regulatory framework. The authorities ensure protection of investments and allow smooth conduct of business operations of an oil and gas company established in Abu Dhabi.
Back to topWhere to Register an Oil and Gas Company in Abu Dhabi?
If you are planning to enter Abu Dhabi’s energy sector, the business must be registered with Abu Dhabi National Oil Company (ADNOC). ADNOC forms partnerships and joint ventures with international companies who wish to be a part of the UAE oil and gas industry.
Once the registration is complete, approval from the Supreme Council for Financial and Economic Affairs (SCFEA) must be secured. The entity oversees all matters related to petroleum and natural resources affairs as it formulates public policies related to the same.
Back to topHow to Set Up an Oil and Gas Company in Abu Dhabi?
You need to follow a specific process when it comes to starting an oil and gas company. Let us look at the involved process for establishing one in Abu Dhabi:
Step 1 - Identify the market
The vast reserves of natural resources in Abu Dhabi makes setting up a business ideal. However, you need to identify the market and consider factors like price fluctuations, regulatory changes, and shifts in market trends. Understanding these will be helpful in setting up a successful business.
Step 2 - Decide Company Type
When starting an oil and gas company in Abu Dhabi, you need to decide on a type of company. In the Emirate, you can choose one among mainland or free zone companies. An investor can set up a mainland company in the UAE only if they hire a local sponsor. The local sponsor holds 51 percent shares of the company. As for a free zone company, you can establish one in any of Abu Dhabi’s free zones and enjoy complete foreign ownership.
Step 3 - Secure Funding
The oil and gas industry is capital-intensive. You must have to secure funding to start and operate the business. Funding can be secured either through loans from banks and financial institutions, or investment from partners.
Step 4 - Obtain Business License
You need to apply and avail the relevant business license to conduct business operations in Abu Dhabi. The authorities offer the option of availing a license depending on the kind of business activity which is to be conducted. For establishing an oil and gas company, you must obtain a commercial license from Abu Dhabi Department of Economic Development (ADDED).
Step 5 - Avail Environmental and Safety Permit
As the UAE puts great emphasis on environment protection and safety, you need to get clearance from the Environment Agency – Abu Dhabi (EAD). It ensures that the business operations are conducted in an eco-friendly manner.
Step 6 - Comply with Labor Laws
The next step involves complying with the labor laws prevalent in Abu Dhabi. It comes in handy when hiring a skilled workforce of engineers, geologists, technicians, and project managers. These laws govern employment contracts, wages, and employee rights and help in building a productive work environment.
Back to topWhy Commitbiz?
An oil and gas business setup in Abu Dhabi requires planning, forming strategic partnerships, and complying with regulatory frameworks. The government’s initiatives to boost oil and gas production speaks volumes about the vast business opportunities in this sector . If you want to set up an oil and gas company in Abu Dhabi, get in touch with the experts of Commitbiz LLC. They can guide you through the entire business process and ensure that the venture is a successful one.
Back to topWhat is ADNOC gas?
ADNOC Gas is a world-class integrated gas company and a subsidiary of ADNOC that supplies around 60 percent of UAE’s natural gas requirements and serves customers in more than 20 countries.
How can I get ADNOC approval for my company?
You must register with ADNOC as a supplier or service provider and meet their eligibility criteria.
Do I need approval from the Supreme Petroleum Council (SPC) for setting up an oil and gas business in Abu Dhabi?
At present you do not need approval from SPC as the governing body is not functional anymore. Approval needs to be secured from the Supreme Council for Financial and Economic Affairs as it looks after matters related to the oil and gas industry.
