BANDAR SERI BEGAWAN – Brunei plans to ramp up production in the upstream and downstream oil and gas sectors after discovering 42 million barrels of oil equivalent at an undisclosed location last year.

Energy Minister YB Dato Hj Mat Suny Hj Md Hussein said that drilling will begin on several exploration wells this year, adding that a few blocks will be tendered out to attract new operators to Brunei.

Speaking at the Legislative Council on Wednesday, he said the government is targeting an output of 300,000 barrels of oil equivalent per day in the upstream sector.

The energy ministry tabled a $240.8 million budget for the 2022/23 fiscal year, a 20 percent increase from the previous year.

The budget includes an allocation of $43.9 million for development projects and $162.6 million for recurring expenses.

Brunei’s oil and gas industry has been hard-hit by the pandemic, reporting its lowest crude oil output in the third quarter of 2021.

With the sultanate still heavily reliant on oil and gas to spur economic growth, the sector’s poor performance precipitated a recession in 2021.

However, the sector is expected to recover this year with Brent crude surging to a seven-year high at over $100 a barrel on Tuesday.

YB Dato Hj Mat Suny said the ministry is also looking to boost production in the downstream sector to 14.6 million tonnes this year.

Spurred by the Hengyi petrochemical plant, the sector recorded an output of 14.35 million tonnes in 2021, worth an estimated $10.7 billion in exports.

The minister added that the government will prioritise the development of downstream projects in the near future, including the export of urea products, aiming to position Brunei as a leading downstream hub for markets in Asia-Pacific.

Energy Minister YB Dato Hj Mat Suny (L) during the Legislative Council meeting on March 2, 2022. Photo: Information Department

Brunei begins transition to low-carbon energy

Going forward, the government will begin to prioritise the transition to a low-carbon energy, the minister said.

The shift to cleaner energy sources is part of Brunei’s pledge under the Paris Agreement to cut emissions by 20 percent over the next 10 years.

YB Dato Hj Mat Suny said the energy ministry established the Industrial Emissions Committee in July 2021, comprising oil and gas operators, regulatory agencies and representatives from tertiary education.

The ministry has already embarked a solar project in Kampung Sungai Akar, and is also considering the feasibility of floating solar farms.

To encourage the use of solar energy, the government will expand its net metering programme which allows residents and companies to sell excess electricity generated from solar panels to the national grid.

In addition to these initiatives, new energy efficiency standards will come into force in June this year. The new laws aim to promote the use of energy-efficient appliances and ensure products meet the minimum energy performance standards.

FILE PHOTO: Brunei Shell Petroleum’s Head of Energy Transition, Shirley Sikun (L), briefs HRH the Crown Prince during the opening of BSP’s flagship Solar PV Plant in April 2021. Photo: Courtesy of BSP

Energy sector aims to boost local workforce

YB Dato Mat Suny said the energy sector aims to strengthen its workforce to 22,900 locals this year.

In 2021, 19,050 Bruneians were employed in the energy sector.

The minister said the development of the sector will also create more opportunities for local businesses.

In terms of local content spending, the ministry is working with Darussalam Enterprise to develop an energy incubation centre at Sg Liang Industrial Park that will help small to medium enterprises participate in the oil and gas industry.

Another entrepreneurship initiative, the I-Usahawan programme, has already awarded contracts valued at $30 million and created jobs for 317 locals.