BANDAR SERI BEGAWAN – Brunei will develop marginal oil fields and venture into deepwater exploration in a bid to boost oil and gas output even as global oil demand remains low.
Brunei Shell Petroleum (BSP) will promote the exploration of new areas to expand oil and gas production, said energy minister YB Dato Seri Setia Dr Hj Mat Suny Hj Md Hussein.
During Legislative Council (LegCo) members’ visit to BSP and other energy facilities on February 3, the minister said deepwater exploration is one of the strategies to increase oil and gas production to 350,000 barrels of oil equivalent per day by 2025.
This comes after Brunei reported its second lowest quarterly oil output in the third quarter of 2020, declining to 101,000 barrels per day due to weak demand.
Brunei’s crude oil production has been on a declining trend since 2006, according to the Centre for Strategic and Policy Studies.
YB Dato Dr Hj Mat Suny said deepwater exploration is a new field in Brunei and requires specific expertise.
Last November, Maersk Drilling had announced that it was awarded a US$9 million contract to drill one deepwater exploration well off the coast of Brunei.
The 35-day contract with BSP is expected to start in March 2021.
The minister said more efficient oil and gas management is essential in ensuring Brunei’s socio-economic development as the hydrocarbon sector contributed 55 percent of GDP and 90 percent of the country’s exports in 2019.
Bruneians make up the majority (89%) of BSP’s workforce.
Brunei Fertilizer Industries to start operations in Q3 2021
YB Dato Dr Hj Mat Suny added that the state-owned Brunei Fertilizer Industries (BFI) at Sg Liang Industrial Park will begin operations in the third quarter of this year.
The $1.8 billion fertiliser plant is expected to produce 0.77 million tonnes per annum (MTPA) of urea in its first year of operation before increasing its output to 1.37 MTPA in 2022.
Brunei aims to achieve 32 MTPA in downstream industry production by 2025.
The fertiliser plant is one of the two largest downstream oil and gas projects in Brunei, alongside Hengyi Industries’ petrochemical plant at Pulau Muara Besar.
German multinational conglomerate thyssenkrupp AG’s Industrial Solutions had signed a contract in 2018 to build the fertiliser plant on a 55-hectare site.
The minister said BFI project would enable Brunei to penetrate new global markets and increase the country’s GDP and exports.
He added that 238 locals are currently employed at BFI, with another 70 job opportunities to be offered to Bruneians by 2025.