Brunei says not affected by oil price collapse
Brunei said it will not halt oil production after the recent massive plunge in oil prices on the global market, but is it considering curbing output in line with a formal agreement between the OPEC+ oil exporter cartel, a group of OPEC allies led by Russia and comprising Brunei, Oman, Bahrain, Malaysia, Azerbaijan, Kazakhstan, Mexico, Sudan and South Sudan.
Brunei’s finance and economy minister Awang Haji Mohd Amin Liew bin Abdullah said on April 21 that there was “obviously an oversupply situation” on the world market which was significantly affecting demand.
However, he said that after he had a discussion with Brunei Shell Petroleum, the country’s largest oil producer, production will be continued while the government will make sure it maintains a diversified portfolio of buyers, mainly from Asia-Pacific and north Asia.
“I think we will still be able to sell our cargo and the question is not about whether we can sell, I think it’s about what price we will sell at,” the minister said, noting that there were still “a lot of buyers in the Asia-Pacific region“ and that China now had reopened some of its factories and began moving its economy forward which would also spur demand.
Not sure about production cut yet
However, he would not clarify whether Brunei would follow suit on the voluntary 23-per cent cut to production that OPEC+ members have formally agreed on in mid-April.
In a rather cagey reply, Liew said that the government was in discussions with Brunei Shell Petroleum and OPEC to see how Brunei can help stabilise the global oil market.
“Without giving too many details on this, I think we are part of a bigger discussion. We collaborate with the OPEC+ group of producers, we are part of the discussion with them,” he said.
Nevertheless, it is expected that historically low oil prices will weigh heavily on Brunei’s economy, as oil and gas accounts for more than two thirds of the country’s GDP and for 95 per cent of exports. In the face of volatile energy markets and a deep global recession caused by coronavirus-imposed lockdowns, the International Monetary Fund has slashed its 2020 growth estimate for Brunei from 4.7 per cent to 1.3 per cent.
Brunei said it will not halt oil production after the recent massive plunge in oil prices on the global market, but is it considering curbing output in line with a formal agreement between the OPEC+ oil exporter cartel, a group of OPEC allies led by Russia and comprising Brunei, Oman, Bahrain, Malaysia, Azerbaijan, Kazakhstan, Mexico, Sudan and South Sudan. Brunei’s finance and economy minister Awang Haji Mohd Amin Liew bin Abdullah said on April 21 that there was “obviously an oversupply situation” on the world market which was significantly affecting demand. However, he said that after he had a discussion...
Brunei said it will not halt oil production after the recent massive plunge in oil prices on the global market, but is it considering curbing output in line with a formal agreement between the OPEC+ oil exporter cartel, a group of OPEC allies led by Russia and comprising Brunei, Oman, Bahrain, Malaysia, Azerbaijan, Kazakhstan, Mexico, Sudan and South Sudan.
Brunei’s finance and economy minister Awang Haji Mohd Amin Liew bin Abdullah said on April 21 that there was “obviously an oversupply situation” on the world market which was significantly affecting demand.
However, he said that after he had a discussion with Brunei Shell Petroleum, the country’s largest oil producer, production will be continued while the government will make sure it maintains a diversified portfolio of buyers, mainly from Asia-Pacific and north Asia.
“I think we will still be able to sell our cargo and the question is not about whether we can sell, I think it’s about what price we will sell at,” the minister said, noting that there were still “a lot of buyers in the Asia-Pacific region“ and that China now had reopened some of its factories and began moving its economy forward which would also spur demand.
Not sure about production cut yet
However, he would not clarify whether Brunei would follow suit on the voluntary 23-per cent cut to production that OPEC+ members have formally agreed on in mid-April.
In a rather cagey reply, Liew said that the government was in discussions with Brunei Shell Petroleum and OPEC to see how Brunei can help stabilise the global oil market.
“Without giving too many details on this, I think we are part of a bigger discussion. We collaborate with the OPEC+ group of producers, we are part of the discussion with them,” he said.
Nevertheless, it is expected that historically low oil prices will weigh heavily on Brunei’s economy, as oil and gas accounts for more than two thirds of the country’s GDP and for 95 per cent of exports. In the face of volatile energy markets and a deep global recession caused by coronavirus-imposed lockdowns, the International Monetary Fund has slashed its 2020 growth estimate for Brunei from 4.7 per cent to 1.3 per cent.
