Energy, Oil & Gas Lawyers
We advise on energy sector contracts, regulatory compliance and contractual disputes.
Overview
Saudi Arabia's energy sector combines very large long-term contracts with a multi-regulator framework: the Ministry of Energy, the Water and Electricity Regulatory Authority, and the local content authority. Every project — conventional or renewable — sits inside a web of licences, offtake agreements and guarantees running twenty years or more.
We handle the legal side of oil and gas field service contracts, power purchase agreements, EPC and O&M contracts, licensing and environmental compliance, and the local content requirements that are now measured, audited contractual conditions rather than recommendations.
What distinguishes energy disputes is that their effect compounds: a carelessly drafted risk allocation clause in year one is paid for every year after. So we start from the risk matrix — force majeure, change in law, grid risk — before we reach price.
The legal framework
Energy projects intersect with several regulators and long-term contractual frameworks:
- The Ministry of Energy and licensing regimes for oil and gas activities
- The Water and Electricity Regulatory Authority and the grid and generation codes
- The Gas Law and hydrocarbon pricing rules
- The local content authority, government procurement and ratio requirements
- The Environment Law, its regulations and operating permits
- The Arbitration Law in long-term project disputes
Situations we handle
A long-term power purchase agreement
Pricing, availability obligations and change-in-law adjustment — clauses that determine viability over twenty years, not one.
An oil or gas field services contract
Liability allocation, insurance and caps on damages are the substance of the contract, not the scope of services alone.
A renewables project
Licensing, grid connection and performance guarantees are arranged before financial close, not after.
Local content requirements
Required ratios affect the supply chain and pricing. They are assessed before bidding, not after award.
A dispute over shutdown or force majeure
How force majeure is defined and what it does to payment is the most litigated clause in energy contracts.
Costly mistakes we see
- 1
Unbalanced risk allocation
Accepting full grid or change-in-law risk looks acceptable at signature and becomes a recurring annual loss.
- 2
Neglecting local content requirements
The ratios are now contractual conditions that are measured and audited, not the advisory targets they once were.
- 3
Ignoring the licensing sequence
Starting work before environmental and operating permits are complete halts the project at its most expensive stage.
- 4
Generic force majeure drafting
Loose wording is construed in favour of whoever holds the stronger position at the time of the dispute, not at signature.
How the procedure runs, step by step
The Saudi energy sector runs on sector licences and strict local content requirements, and its contracts are long-term with regulatory risk that shifts during the life of the contract.
- 1
Identify the licence and the regulator
We identify the competent body by activity: the Ministry of Energy, the Water and Electricity Regulatory Authority, or the mining and gas authorities. Operating without the right licence stops the business, not just its cash flow.
- 2
Measuring and evidencing local content
We review the local content and localisation percentages required by the contract or licence, and how they are measured and evidenced. Failing the local content ratio is a penalty event in many sector contracts.
- 3
Structure the long-term contract
Supply, service and power purchase agreements need price adjustment mechanisms, regulatory risk allocation, and a change-of-law clause. A ten-year fixed-price contract with no adjustment mechanism is an unpriced risk.
- 4
Environment, safety and compliance
We review the National Center for Environmental Compliance requirements and operating permits. An environmental breach halts the project and creates administrative and criminal exposure for individuals, not only the company.
- 5
Managing sector disputes
Disputes here are technical by nature and usually go to arbitration with technical expertise. We gather technical evidence during operations rather than after the dispute, because reconstructing the technical record later is near impossible.
Documents we will ask you for
- Current sector licences
- The long-term contract or agreement and its schedules
- The local content plan and measurement reports
- Environmental permits and reports
- Technical and operating records for the disputed period
- Correspondence with the regulator
Fees and timelines
Energy contracts are priced per document set according to project scale: reviewing a power purchase agreement, an EPC and O&M package, or a licensing file. Large projects are divided into phases with a written scope and fee for each.
On timing: reviewing an existing contract takes one to two weeks. Negotiating a power purchase agreement typically runs two to six months. Licensing files move at the regulator's pace and take months.
Common questions
What is the most important clause in a power purchase agreement?
The pricing mechanism, the availability obligation, and what happens on a change in law or fuel tariff. These determine viability across two decades and matter far more than the headline tariff agreed at the start.
Who bears grid risk?
It is allocated contractually and varies by project. Placing the full risk of grid outage or transmission interruption on the developer makes financing harder, and a balanced split is usually what makes a project bankable.
What are the local content requirements?
Defined percentages of local spend, employment and sourcing depending on the project and the contracting entity. They are measured and audited, and non-compliance has direct consequences for payment certificates and evaluation.
Do we need a licence for a renewables project?
Yes, generation activities require a licence from the regulator, alongside grid connection agreements and environmental permits. Running those tracks in parallel is what compresses the schedule.
How should force majeure be drafted?
With a clear list of events, their effect on obligations and payment, notice periods, and a termination right if the event persists. Generic wording is the single most disputed provision in energy contracts.
Is arbitration suitable for energy disputes?
Usually yes, because disputes are technical and high value and benefit from an expert tribunal, and confidentiality matters to parties whose relationship runs for two decades. But the clause must be drafted precisely from the outset.
What are our environmental obligations?
Operating permits, emissions standards and periodic reporting depending on the activity. Compliance should be built as a documented internal procedure, because a breach can halt operations rather than merely attracting a fine.
Do you review subcontracts?
Yes, and it is a sensitive point: where the subcontract does not mirror the main contract on periods, liability and insurance, the entire gap falls on the main contractor for nothing.
Related services
Lawyers for Oil & Gas Companies
Specialist legal support for oil and gas companies.
Public Procurement Lawyers
We help suppliers qualify and compete for government contracts, and challenge award decisions.
Construction & Engineering Lawyers
We act for owners, contractors and consultants on project contracts and disputes.