Energy Law - Saudi Arabia

Saudi Arabia

Saudi Arabia has some laws concerning energy, especially oil and gas law. Saudi Arabia is the largest oil producer in the world and therefore its energy law has great influence over the world's overall energy supply.

Under the Basic Law of Saudi Arabia, all its oil and gas wealth belongs to the government: "All Allah's bestowed wealth, be it under the ground, on the surface or in national territorial waters, in the land or maritime domains under the state's control, are the property of the state as defined by law. The law defines means of exploiting, protecting, and developing such wealth in the interests of the state, its security and economy." Energy taxes are also specifically allowed; Article 20 of the basic law states, "Taxes and fees are to be imposed on a basis of justice and only when the need for them arises. Imposition, amendment, revocation and exemption is only permitted by law."

Two ministries of the Kingdom of Saudi Arabia share the responsibility of the energy sector: the Ministry of Oil and the Ministry of Water and Electricity. The country's laws have also established other agencies that have some legal powers, but are not strictly regulatory. These include Saudi Aramco, originally a joint venture between the Kingdom and the California-Arabian Standard Oil, but now a wholly owned by the Kingdom, and Saudi Consolidated Electricity Companies (SCECOs).