The legal system of the Petroleum franchises in the kingdom of Saudia Arabia

Abstract

Oil is considered as one of the economic pillars nowadays and the cornerstone of wealth in countries whose lands contain large amount of oil. Gulf counties and particularly the Kingdom of Saudi Arabia are at the top of such counties.

The Kingdom of Saudi Arabia enjoys huge surplus of oil in its lands. Saudi economy depends on such large amount of oil production. Recently there are other sources of wealth in Saudi Arabia, but oil is the first source of income in the Kingdom regarding investments and economy. Oil also affects the Saudi currency price (Saudi riyal) on the international level.

Therefore, we paid much attention in this research to the study of oil and its legal system to show the investors how the transactions and investments concerning excavation for oil in the Kingdom of Saudi Arabia.

We started by displaying historical sides to show how oil was discovered in the Kingdom. Then we stated the effects of oil discovery and the rights resulting from excavation for oil regarding some Arab countries and western countries. We also stated these rights in Islamic Sharea and the rights and obligations resulting from this type of franchise in the Kingdom.

We also expressed the nature of the franchise through giving a definition of it stating three types of the main petroleum franchises in the kingdom. We also explained the method of terminating these franchise special contracts and the means of solving the disputes resulting from them represented in arbitration. We also explained the legal frame of arbitration structure regarding its legal nature and the applicable law.

We concluded our research by displaying special applications of the disputes and differences resulting from oil franchise contracts.

Thus we explained the legal framework of oil franchise contracts.