Brunei puts economic diversification on back burner after new oil discovery
Brunei plans to expand production in the upstream and downstream oil and gas sectors after a new discovery of 42 million barrels of oil equivalent at an undisclosed location last year, The Scoop cited energy minister Mat Suny Mohd Hussein as saying.
Drilling will begin on several exploration wells this year, adding that a few blocks will be tendered out to attract new operators to Brunei, he announced at a speech on March 2, adding that the government is targeting an output of 300,000 barrels of oil equivalent per day.
The energy ministry is now planning a $240.8 million budget for the 2022/23 fiscal year, a 20-per cent 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 sector hard hit by pandemic
The expansion in Brunei’s oil and gas sector comes after the industry has been hard-hit by the Covid-19 pandemic, with the country’s lowest crude oil output ever recorded in the third quarter of 2021, resulting in an overall recession for the full year.
Despite efforts to diversify Brunei’s economy in recent times as strongly recommended by economists, the nation remains heavily reliant on oil and gas to spur economic growth.
This year, however, the sector is expected to do fairly well with both WTI and Brent crude surging to new multi-year highs at over $110 a barrel as of March 4 from higher demand amid the global economic recovery from the pandemic and as a result of the Russian invasion of Ukraine.
Boosting downstream production
The minister said that Brunei is also looking to boost production in the downstream sector to 14.6 million tonnes of polyethylene products this year. Driven by the Chinese-built Hengyi petrochemical plant which started operations in 2019, 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.
The energy sector also aims to strengthen its local workforce to 22,900 this year, up from 19,050 in 2021, the minister said.
[caption id="attachment_38274" align="alignleft" width="300"] Oil and gas remains by far Brunei's economic lifeline[/caption] Brunei plans to expand production in the upstream and downstream oil and gas sectors after a new discovery of 42 million barrels of oil equivalent at an undisclosed location last year, The Scoop cited energy minister Mat Suny Mohd Hussein as saying. Drilling will begin on several exploration wells this year, adding that a few blocks will be tendered out to attract new operators to Brunei, he announced at a speech on March 2, adding that the government is targeting an output of 300,000 barrels of oil...
Brunei plans to expand production in the upstream and downstream oil and gas sectors after a new discovery of 42 million barrels of oil equivalent at an undisclosed location last year, The Scoop cited energy minister Mat Suny Mohd Hussein as saying.
Drilling will begin on several exploration wells this year, adding that a few blocks will be tendered out to attract new operators to Brunei, he announced at a speech on March 2, adding that the government is targeting an output of 300,000 barrels of oil equivalent per day.
The energy ministry is now planning a $240.8 million budget for the 2022/23 fiscal year, a 20-per cent 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 sector hard hit by pandemic
The expansion in Brunei’s oil and gas sector comes after the industry has been hard-hit by the Covid-19 pandemic, with the country’s lowest crude oil output ever recorded in the third quarter of 2021, resulting in an overall recession for the full year.
Despite efforts to diversify Brunei’s economy in recent times as strongly recommended by economists, the nation remains heavily reliant on oil and gas to spur economic growth.
This year, however, the sector is expected to do fairly well with both WTI and Brent crude surging to new multi-year highs at over $110 a barrel as of March 4 from higher demand amid the global economic recovery from the pandemic and as a result of the Russian invasion of Ukraine.
Boosting downstream production
The minister said that Brunei is also looking to boost production in the downstream sector to 14.6 million tonnes of polyethylene products this year. Driven by the Chinese-built Hengyi petrochemical plant which started operations in 2019, 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.
The energy sector also aims to strengthen its local workforce to 22,900 this year, up from 19,050 in 2021, the minister said.
