Gas development has become a top priority for Abu Dhabi in recent years due to growing domestic electricity demand. Unlike oil exploration and production, for which there is essentially no legislative framework, gas development is subject to Abu Dhabi’s Natural Gas Ownership Law of 1976, which grants the Emirate ownership of all natural gas and requires ADNOC majority participation in all gas projects.
Ownership of Natural Gas Law -
The 1939 and 1953 concessions signed for oil development in Abu Dhabi (see our previous edition for more information) did not address the production of natural gas. At the time there was no infrastructure to consume or export gas, and associated gas was typically flared by field operators. Flaring of natural gas was a major issue of conflict between field operators and Abu Dhabi in the early years of oil development.
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