Brunei 2

Brunei Geography - 2004 http://www.immigration-usa.com/wfb2004/brunei/brunei_geography.html SOURCE: 2004 CIA WORLD FACTBOOK

Location: Southeastern Asia, bordering the South China Sea and Malaysia Geographic coordinates: 4 30 N, 114 40 E Map references: Southeast Asia Area: total: 5,770 sq km water: 500 sq km land: 5,270 sq km Area - comparative: slightly smaller than Delaware Land boundaries: total: 381 km border countries: Malaysia 381 km Coastline: 161 km Maritime claims - as described in UNCLOS 1982 (see Notes and Definitions): territorial sea: 12 NM exclusive economic zone: 200 NM or to median line Climate: tropical; hot, humid, rainy Terrain: flat coastal plain rises to mountains in east; hilly lowland in west Elevation extremes: lowest point: South China Sea 0 m highest point: Bukit Pagon 1,850 m Natural resources: petroleum, natural gas, timber Land use: arable land: 0.57% permanent crops: 0.76% other: 98.67% (1998 est.) Irrigated land: 10 sq km (1998 est.) Natural hazards: typhoons, earthquakes, and severe flooding are rare

Environment - current issues: seasonal smoke/haze resulting from forest fires in Indonesia Environment - international agreements: party to: Endangered Species, Hazardous Wastes, Law of the Sea, Ozone Layer Protection, Ship Pollution signed, but not ratified: none of the selected agreements Geography - note: close to vital sea lanes through South China Sea linking Indian and Pacific Oceans; two parts physically separated by Malaysia; almost an enclave of Malaysia

The Economy of Brunei

General Overview Land, Labour and Capital Primary Resources

External Trade Banking Employment

Brunei Darussalam is still very much dependent on revenues from crude oil and natural gas to finance its development programmes. Aside from this, Brunei Darussalam also receives income from rents, royalties, corporate tax and dividends. Due to the non-renewable nature of oil and gas, economic diversification has been in Brunei Darussalam's national development agenda. In the current Seventh national Development Plan, 1996-2000, the government has allocated more than $7.2 billion for the implementation of various projects and programmes. Brunei Darussalam is the third largest oil producer in Southeast Asia and it produced 163,000 barrels per day. It is also the fourth largest producer of liquefied natural gas in the world. Economic Indicators GDP at current prices (Million B$) : 8.051.0 (1997 estm.) Average annual inflation rate: 2.7 percent Unemployment rate: 4.9 percent

Although Brunei Darussalam is no giant when it comes to landmass, it has been blessed with rich natural resources and a strategic location within the region. The majority of the country is covered in tropical rainforests teeming with exotic flora and fauna. Anxious to promote the conservation of its lush surroundings, eco-tourism has gained importance in the country's economic activities. Human resources are central to the successful transformation of Brunei Darussalam into a diversified industrial economy. As in most developing nations, there is a shortage of skilled workforce in the country. Therefore, greater emphasis is placed upon education. The main areas of interest in human resources development are managerial and industrial skills, with particular emphasis on entrepreneurial skills as well as vocational and technical training. Brunei Darussalam's main exports consist of three major commodities - crude oil, petroleum products and liquefied natural gas - sold largely to Japan, the United States and ASEAN countries. The Government's move to promote non-oil and gas activities has been largely successful with figures showing 64% of GDP in 1996 compared to only 24.3% in 1991.

Agriculture Rice Production Various efforts have been made by the government to encourage rice production during the last decade and the yield per acre has increased due to the introduction of better agricultural methods. Approximately 290 tones of 1 percent of the nation's rice needs are produced locally from 613 hectares of rice fields scattered around the country. As a first step towards the attainment of self-sufficiency in rice, the government launched in 1978 an experimental large scale mechanized rice planting project at Kampong Wasan. Covering an area of 400 hectares, the project was a joint undertaking between the Agriculture Department and the Public Works Department. The Public Works Department was responsible for providing the required infrastructure, clearing the land and giving other basic provisions. The Agriculture Department was responsible for actual planting, maintenance, harvesting and processing. The project is also aimed at planting padi twice a year, from April to September and from October to March. Fruit Farming Fruit farming is largely performed on a small scale. There is a vast range of locally produced tropical fruits, which supply some 11% of domestic requirements of more than 14,000 tones. In 1975, the Agriculture Department initiated a fruit-farming scheme to encourage fruit cultivation in the country. In an effort to increase the production of local fruits, the government through the agricultural stations in Batang Mitus, Tanah Jambu and Lumapas, planted seedlings of various fruit trees including rambutan, durian and oranges. Vegetables Locally grown vegetables constitute about 6,700 tones or just over 65 percent of the country's needs. The amount increases gradually as more people are taking up vegetable farming. Livestock The country produces about 1,000 head of cattle and bufaloes for the market annually at about six percent of its own beef consumption, The Government assists local stock farmers with calves, machinery, feed, seedlings, fertilizers and veterinary care. The country requires 3,000 to 5,000 tones of meat annually, with per capita consumption of betweeen 9 and 17 kg. To meet demand, it has to import an average of between 4,000 and 7,000 head of live cattle from its Wileroo Ranch in the Northern of Australia. Local fresh milk production contributes about 199 thousand litters annually.

Research has been carried out to ascertain the best possible way to increase the buffalo population. Towards this end, the agriculture Department has launched a research project covering 4000 hectares in the Batang Mitus area in the Tutong District. So far, over 200 hectares have already been initiated. The farm's main aim will be to assess local and imported stock towards producing highbred buffaloes for commercial purposes. Forestry About three quarters of Brunei Darussalam's total land area are covered by forests. However, their contribution to the economy is minimal. Logging, limited to 100 thousand cubic meters annually, is confined to meeting local needs only. Fisheries With the proclamation of the 200 nautical miles Brunei Fisheries Limits in 1983 and the identification of potential areas for fisheries activities, the value of fisheries industry is estimated to be worth more than B$200 million. At the present exploitation and utilization, the fisheries sector of Brunei Darussalam, comprising capture, aqua-culture and seafood processing contributed about 0.5% of the total Gross Domestic Product (GDP), or about B$37.2 million, at current prices. It provides work to more than 1,500 involved in this sector. With realistic potential for export, however lacking in relevant resources, including associated technology, the development of fisheries industry needs involvement of foreign investment. The government, through the Fisheries Department therefore has been actively promoting suitable foreign involvement, either in the form of joint partnership or other forms of strategic alliances, aimed at developing the fisheries sector towards a competitive, efficient and commercially lucrative venture.

Oil and Gas Crude oil and liquefied natural gas are the main exports of Brunei Darussalam. From January to June 1998 it exported 134.77 trillion BTU or 88.94 percent to Japan and 16.75 trillion BTU or 11.06 percent to the Republic of Korea. Under a Sale and Purchase Extension Agreement signed by BLNG and the Japanese Buyers in 1993, the LNG Plant at Lumut exports annually about 5.54 million metric tons of LNG to Japan. In June 1998, a further amendment made known as the Sale and Purchase Extension Agreement Amendment had been signed which increased the sales for an additional 14 cargoes per annum to Japan starting from 1999 till the year 2013. In October 1997, a sale and purchase agreement had been signed to deliver 0.7 million metric tons of LNG to the Republic of Korea until the year 2013. In total, 200 'B' class LNG cargoes

equivalent will be delivered annually to the buyers in Japan and the Republic of Korea from the year 1999 to 2013. In March 1998, the Government of His Majesty the Sultan and Yang Di-Pertuan of Negara Brunei Darussalam formed a Joint-venture company the Brunei Gas Carriers Sendirian Berhad (BGC) with Shell International Gas and Mitsubishi Corporation. Currently, Brunei LNG Plant processes natural gas supplied from offshore gas fields owned by the Brunei Shell Petroleum Company Sendirian Berhad. From 1st April, 1999 LNG will receive additional natural gas from a non-Brunei Shell owned Maharajalela Jamalulalam Field. Oil and Gas accounted for about 36% of the country's Gross Domestic Product in 1996.

Brunei Darussalam is well served by several commercial banks with branches throughout the country. The first banking was opened more than fifty years ago when the Government set up the Post Office Savings Bank (POSB) in 1935. Brunei Darussalam operates a Currency Board system and has no Central Bank. The Government under the Banking Acts and Finance Companies Act regulates the banking industry. The Ministry of Finance through the Financial Institutions Division closely regulates all banking activities to ensure a stable and fiscally sound business environment. The Brunei Currency Board is responsible for issuing and managing the currency. The Brunei Dollar is at par with the Singapore Dollar and are both freely traded in the respective countries. There are currently no exchange controls in Brunei. Money changer facilities are also available. The banks continue to support local businessmen in their endeavor and thus help in the development of Brunei Darussalam. There are 9 banks (3 incorporated in Brunei) with branches throughout the country. List of Banks: Baiduri Bank Berhad Citibank Development Bank of Brunei Berhad Hongkong Bank Islamic Bank of Brunei Berhad (IBB) Berhad Malayan Banking Berhad Overseas Union Bank (OUB) Standard Chartered Bank Sime Bank Berhad Currency:

The unit currency is the Brunei dollar, divided into 100 cents. Exchange Rate: US$1.00 = between B$1.43 and B$1.60

Brunei Darussalam's small population accounts for its limited labor force. With the implementation of ambitious plans in recent years, the country has had to recruit both skilled and unskilled labor from abroad. There are about 36,345 (early 1998) workforce in the government sector and more than 106 thousand wage earners in the private sector. This figure, however, does not include members of the Security Forces, daily-rated employees an domestic servants in private employment.

Brunei forest jpg

petroleum, natural gas, timber

brunei shell petroleum building

oil refinery flare stack brunei

Nat gas

Economy of Brunei From Wikipedia, the free encyclopedia Jump to: navigation, search This article does not cite any references or sources. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (December 2006)

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Economy of Brunei Currency

1 Brunei dollar = 100 cent

Fiscal year

1 April – 31 March (from April 2004)

Trade APEC, ASEAN, WTO organisation s Statistics [1] GDP ranking

122nd

GDP

$20.25 billion (2008[update])

GDP growth

0.4% (2008[update])

GDP per capita

$53,100 (8th, 2008[update])

GDP by sector

agriculture (0.7%), industry (75%), services (25%) (2005[update])

Inflation

0.3% (2007[update])

Pop below poverty line

N/A

Labour force 188,800 (2003[update]) Labour force agriculture 4.5%, by industry 63.1%, occupation services 32.4% (2003[update]) Unemployme 3.7% (2008[update]) nt Main industries

petroleum, petroleum refining, liquefied natural gas, construction

Trading Partners [2] Exports

$8.25 billion f.o.b. (2007[update])

Main

crude oil, natural gas,

commodities [[[garments]] Main partners

Japan 32.8%, Indonesia 24.4%, Australia 13.4%, South Africa 12.2%, US 5.5% (2007[update])

Imports

$2.055 billion c.i.f. (2007[update])

Main machinery and commodities transport equipment, manufactured goods, food, chemicals Main Partners

UK 46.4%, Singapore 19.5%, Malaysia 11.3% (2007[update])

Public finances [3] Public debt

N/A

Revenues

$6.889 billion (2008[update])

Expenses

$4 billion (2008[update]) edit

The small, wealthy economy is a mixture of foreign and domestic entrepreneurship, government regulation and welfare measures, and village tradition. It is almost totally supported by exports of crude oil and natural gas, with revenues from the petroleum sector accounting for over half of GDP. Per capita GDP is far above most other Third World countries, and substantial income from overseas investment supplements income from domestic production. The government provides for all medical services and subsidizes food and housing. The government has shown progress in its basic policy of diversifying the economy away from oil and gas. Brunei's leaders are concerned that steadily increased integration in the world economy will undermine internal social cohesion although it has taken steps to become a more prominent player by serving as chairman for the 2000 APEC (Asian Pacific Economic Cooperation) forum. Growth in 1999 is estimated at 2.5% due to higher oil prices in the second half. Brunei is the third-largest oil producer in Southeast Asia, averaging about 180,000 barrels (29,000 m³) a day. It also is the fourth-largest producer of liquefied natural gas in the world.

[edit] Macro-economic trend This is a chart of trend of gross domestic product of Brunei Darussalam at market prices estimated by the International Monetary Fund with figures in millions of Bruneian Dollars. Yea Gross Domestic r Product

US Dollar Exchange

Inflation Index (2000=100)

198 7,752 5

2.20 Bruneian Dollars

76

199 6,509 0

1.81 Bruneian Dollars

82

199 7,394 5

1.41 Bruneian Dollars

95

200 7,441 0

1.72 Bruneian Dollars

100

200 10,400 5

1.62 Bruneian Dollars

100

For purchasing power parity comparisons, the US Dollar is exchanged at 1.52 Bruneian Dollars only. Average wages in 2007 hover around $161-195 per day. The government regulates the immigration of foreign labor out of concern it might disrupt Brunei's society. Work permits for foreigners are issued only for short periods and must be continually renewed. Despite these restrictions, foreigners make up a significant portion of the work force. The government reported a total work force of 122,800 in 1999, with an unemployment rate of 5.5%. Oil and natural gas account for almost all exports. Since only a few products other than petroleum are produced locally, a wide variety of items must be imported. Brunei statistics show Singapore as the largest point of origin of imports, accounting for 25% in 1997. However, this figure includes some transshipments, since most of Brunei's imports transit Singapore. Japan and Malaysia were the second-largest suppliers. As in many other countries, Japanese products dominate local markets for motor vehicles, construction equipment, electronic goods, and household appliances. The United States was the third-largest supplier of imports to Brunei in 1998. Brunei's substantial foreign reserves are managed by the Brunei Investment Agency (BIA), an arm of the Ministry of Finance. BIA's guiding principle is to increase the real value of Brunei's foreign reserves while pursuing a diverse investment strategy, with holdings in the United States, Japan, western Europe, and the Association of South East Asian Nations (ASEAN) countries. The Brunei Government actively encourages more foreign investment. New enterprises that meet certain criteria can receive pioneer status, exempting profits from income tax for up to 5 years, depending on the amount of capital invested. The normal corporate income tax rate is 30%. There is no personal income tax or capital gains tax.

One of the government's most important priorities is to encourage the development of Brunei Malays as leaders of industry and commerce. There are no specific restrictions of foreign equity ownership, but local participation, both shared capital and management, is encouraged. Such participation helps when tendering for contracts with the government or Brunei Shell Petroleum. Companies in Brunei must either be incorporated locally or registered as a branch of a foreign company and must be registered with the Registrar of Companies. Public companies must have a minimum of seven shareholders. Private companies must have a minimum of two but not more than 50 shareholders. At least half of the directors in a company must be residents of Brunei. The government owns a cattle farm in Australia that supplies most of the country's beef. At 2,262 square miles (5,859 km²), this ranch is larger than Brunei itself. Eggs and chickens are largely produced locally, but most of Brunei's other food needs must be imported. Agriculture and fisheries are among the industrial sectors that the government has selected for highest priority in its efforts to diversify the economy.

[edit] Oil and Gas Industry Brunei Shell Petroleum (BSP), a joint venture owned in equal shares by the Brunei Government and the Royal Dutch/Shell group of companies, is the chief oil and gas production company in Brunei. It also operates the country's only refinery. BSP and four sister companies constitute the largest employer in Brunei after the government. BSP's small refinery has a distillation capacity of 10,000 barrels (1,600 m³) per day. This satisfies domestic demand for most petroleum products. The French oil company Elf Aquitaine became active in petroleum exploration in Brunei in the 1980s. Its affiliate Elf Petroleum Asia BV has discovered commercially exploitable quantities of oil and gas in three of the four wells drilled since 1987, including a particularly promising discovery announced in early 1990. Recently, UNOCAL, partnered with New Zealand's Fletcher Challenge has been granted concessions for oil exploration. Brunei is preparing to tender concessions for deep water oil and gas exploration. Brunei's oil production peaked in 1979 at over 240,000 barrels (38,000 m³) per day. Since then it has been deliberately cut back to extend the life of oil reserves and improve recovery rates. Petroleum production is currently averaging some 200,000 barrels (32,000 m³) per day. Japan has traditionally been the main customer for Brunei's oil exports, but its share dropped from 45% of the total in 1982 to 19% in 1998. In contrast, oil exports to South Korea increased from only 8% of the total in 1982 to 29% in 1998. Other major customers include Taiwan (6%), and the countries of ASEAN (27%). Brunei's oil exports to the United States accounted for 17% of the total exported. Almost all of Brunei's natural gas is liquefied at Brunei Liquefied Natural Gas (LNG) plant, which opened in 1972 and is one of the largest LNG plants in the world. Over 82% of Brunei's LNG produced is sold to Japan under a long-term agreement renewed in 1993. The agreement calls for Brunei to provide over 5 million tons of LNG per year to three Japanese utilities. The Japanese company, Mitsubishi, is a joint venture partner with Shell and the Brunei Government in Brunei LNG, Brunei Coldgas, and Brunei Shell Tankers, which together produce the LNG and supply it to Japan. Since 1995, Brunei has supplied more than 700,000 tons of LNG to the Korea Gas Corporation as well. In 1999, Brunei's natural gas production reached 90 cargoes per day. A small amount of natural gas is used for domestic power generation. Brunei is the fourth-largest exporter of LNG in the Asia-Pacific region behind Indonesia, Malaysia, and Australia.

Brunei's proven oil and gas reserves are sufficient until at least 2015, and planned deep sea exploration is expected to find significant new reserves. The government sought in the past decade to diversify the economy with limited success. Oil and gas and government spending still account for most of Brunei's economic activity. Brunei's non-petroleum industries include agriculture, forestry, fishing, and banking.

[edit] Macroeconomic trend This is a chart of trend of gross domestic product of Brunei Darussalam at market prices estimated by the International Monetary Fund with figures in millions of Bruneian Dollars. In the 1970s, Brunei invested sharply increasing revenues from petroleum exports and maintained government spending at a low and constant rate. Consequently, the government was able to build its foreign reserves and invest them around the world to help provide for future generations. Part of the reserve earnings were reportedly also used to help finance the government's annual budget deficit. Since 1986, however, petroleum revenues have decreased, and government spending has increased. The government has been running a budget deficit since 1988. The disappearance of a revenue surplus has made Brunei's economy more vulnerable to petroleum price fluctuations. Brunei's gross domestic product (GDP) soared with the petroleum price increases of the 1970s to a peak of $5.7 billion in 1980. It declined slightly in each of the next 5 years, then fell by almost 30% in 1986. This drop was caused by a combination of sharply lower petroleum prices in world markets and voluntary production cuts in Brunei. The GDP recovered somewhat since 1986, growing by 12% in 1987, 1% in 1988, and 9% in 1989. In recent years, GDP growth was 3.5% in 1996, 4.0% in 1997, 1.0% in 1998, and an estimated 2.5% in 1999. However, the 1999 GDP was still only about $4.5 billion, well below the 1980 peak. The Asian financial crisisin 1997 and 1998, coupled with fluctuations in the price of oil have created uncertainty and instability in Brunei's economy. In addition, the 1998 collapse of Amedeo Development Corporation, Brunei's largest construction firm whose projects helped fuel the domestic economy, caused the country to slip into a mild recession.

THE MINERAL INDUSTRY OF BRUNEI By John C. Wu

Brunei is a small country on the northwestern coast of Borneo Island in Southeast Asia. The country’s land area is about 5,270 square kilometers, and its population was about 358,000 in 2003. Brunei’s per capita income was among the highest in Asia and the Pacific region because of its rich resources of petroleum and natural gas. Brunei’s per capita gross domestic product (GDP) based on purchasing power parity was estimated to be $15,407 (International Monetary Fund, 2004a§1). The country’s proven reserves of crude petroleum and natural gas were estimated to be 1.35 billion barrels and 390.77 billion cubic meters, respectively (Oil & Gas Journal, 2003a). In addition to petroleum and natural gas, Brunei also has small resources of carbonate rocks, coal, kaolin, sand and gravel, and silica sand (Quazi, 1996, p. 1-7). In the region, Brunei ranked fourth in the production of liquefied natural gas (LNG), seventh in the production of crude petroleum, and eighth in the production of natural gas in 2003 (Oil & Gas Journal, 2003a; Alexander’s Gas & Oil Connections, 2003§). In 2003, Brunei’s real GDP grew by 3.6% compared with

3.2% in 2002 owing to the increased output of oil and gas and higher Government development spending. The country’s GDP, in current prices, was estimated to be $4.76 billion compared with $4.28 billion in 2002 (International Monetary Fund, 2004a§). In 2002 (the last year for which data were available), the output of oil and gas accounted for 37% of the GDP; exports of oil and gas, which were estimated to be $3.46 billion, accounted for 89% of Brunei’s total export earnings ($3.87 billion); and the oil and gas industry contributed 87% of the Government’s revenues (International Monetary Fund, 2004b§). The 6 key members (Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand) of the 10-member Association of Southeast Asian Nations (ASEAN) agreed to cap tariffs on imports from within ASEAN at 5% effective January 1, 2003. These six countries, which were the first signatories to the ASEAN Free Trade Area (AFTA) agreement, had substantially achieved the aim of reducing tariffs in the region to 5% or less on almost all products under the Common Preferential Tariff (CEPT) system (BruDirect.com, 2003d§). In November, Brunei Shell Petroleum Company Sdn. Bhd. (BSP), which was Brunei’s major producer of oil and natural gas, shipped surplus lead compound and sludge from two tetra-ethyl-lead storage vessels that had been demolished at the Seria Oil Refinery to the United Kingdom. The surplus lead compound and sludge had been classified as hazardous waste that needed to be properly recovered, treated, and disposed of in a safe and environmentally approved manner. BSP’s action was in response to the call made by the Government for a lead-free Brunei and supported a worldwide drive toward a lead-free environment. It was also in full compliance with the Basel Convention, which is a major international environmental protection treaty that regulates the transportation and movement of hazardous waste (BruDirect.com, 2003c§). In September, the Brunei Economic Development Board (BEDB) and Alcoa Inc. of the United States signed a memorandum of understanding (MOU) to undertake a feasibility study on the establishment of an aluminum smelter and its associated infrastructure in Brunei. According to the BEDB, development of downstream and manufacturing industries, power supply, and infrastructure in the major industrial site of Sungai Liang was an integral part of the plans to diversify Brunei’s oil- and gas-based economy and to create jobs and opportunities for its people. As a necessary condition of the study, an assessment of the environmental impact of the aluminum smelter would need to be completed before a final investment decision could be made. According to the MOU, Alcoa was to carry out the study in two phases during a 2-year period that was to begin in the fourth quarter of 2003. If the project were approved, then a smelter to produce primary aluminum would be built, which would involve foreign investment of up to $1.5 billion and would create about 1,000 jobs (BruDirect.com, 2003g§). Brunei’s mineral industry consisted of a small sector of industrial minerals and a larger sector of oil and gas. The industrial minerals sector comprised more than 20 small

privately owned companies that engaged in the production and marketing of cement, construction aggregates, and sand and gravel. The cement company operated a 500,000-metric-tonperyear (t/yr) cement-grinding plant near Muara. The plant used imported clinker and gypsum to produce portland cement and such specialty cements as oil well cement and slag cement. Cement production averaged 230,000 t/yr, or about 50% of its capacity, in the past 4 years. The oil and gas sector comprised the following operating companies: Brunei Shell Companies, Shell New Zealand Ltd., and Total S.A. (formerly TotalFinaElf S.A.). Brunei Shell consisted of BSP, Brunei Shell Marketing Sdn. Bhd. (BSM), Brunei LNG Sdn. Bhd. (BLNG), and Brunei Shell Tankers Sdn. Bhd. (BST). BSP conducted oil and gas exploration, produced and refined crude petroleum, produced and processed natural gas, marketed crude petroleum, and traded natural gas, crude petroleum, and refined petroleum products. BSM marketed refined petroleum and petrochemical products in the domestic market. BLNG processed and marketed LNG in the overseas markets. BST transported LNG to overseas markets. Total and Shell New Zealand conducted oil and gas exploration and produced natural gas and natural gas liquid (condensate). In 2003, a consortium of Total (60%), BHP Billiton Ltd. (25%), and Amerada Hess Corp. (15%) and a consortium of Royal Dutch/Shell Petroleum Co. (50%), ConocoPhillips Company (25%), and Mitsubishi Corp. (25%), which had been awarded offshore deepwater blocks J and K, respectively, within the Brunei’s Exclusive Economic Zone (EEZ) offshore Brunei by Brunei National Petroleum Company (PetroleumBRUNEI) 6.2 U.S. GEOLOGICAL SURVEY MINERALS YEARBOOK—2003

in early 2002, began exploring for oil and gas (Petroleum Economist, 2003). In January 2003, Total reported that it had made a significant natural gas and condensate discovery in its joint-venture block B, which was located about 50 kilometers offshore north of the nation’s capital Bandar Seri Begawan. The joint-venture block was owned by Total (37.5%), Royal Dutch/Shell (35%), and local partners (27.5%) (BruDirect.com, 2003h§). In June, Total announced that it had suspended exploration work in its joint-venture block J in May because of a territorial dispute between Brunei and Malaysia. The consortium that was led by Royal Dutch/Shell reportedly also was to put exploration work in its joint-venture block K on hold until the two countries’ overlapping claims were resolved (BruDirect.com, 2003a§, e§). During 2003, Brunei and Malaysia were in a maritime border dispute that began soon after Malaysia’s state-owned Petroliam Nasional Bhd. signed a production-sharing contract with Murphy Oil Corp. for oil exploration blocks L and M off Sabah, Malaysia; these blocks overlapped blocks J and K. Brunei and Malaysia began discussions in mid-2003 to resolve the border issue. According to a local press report, the United Nations and the International Courts had considered asking the members of the ASEAN to act as a peace-keeping force if the conflict worsened (BruDirect.com, 2003e§, f§, i§). By yearend, the Brunei and Malaysia maritime border dispute remained

unresolved. Output of crude petroleum, which included condensate, averaged about 208,000 barrels per day. Output of natural gas was estimated to be 32.9 million cubic meters per day. In 2003, BSP produced crude petroleum, natural gas, and natural gas liquid (condensate) from 772 producing wells in 8 offshore fields (Ampa Southwest, Champion, Champion West, Enggang, Fairley, Fairley-Baram, Iron Duke, and Magpie) and two onshore fields (Rasau and Seria-Tali). Total and Shell New Zealand jointly produced natural gas and natural gas liquid from seven producing wells in the offshore Maharaja Lela Field (Oil & Gas Journal, 2003b). In 2002 (the last year for which data were available), crude petroleum was exported to Thailand (27.3%), Australia (17.3%), the Republic of Korea (16.1%), China (12.5%), Japan (12.2%), and other countries that included Indonesia, New Zealand, the Philippines, Singapore, and the United States (Petroleum Unit, 2003§). Of the natural gas produced in 2002 (the last year for which data were available), 85% was consumed by the LNG plants for LNG production; 9%, by the domestic powerplants for electricity generation; and 6%, by the oil and gas industry. Production of LNG by BLNG at the Lumut plant in Seria was about 6.8 Mt/yr, or about 10.2 billion cubic meters per year. The production capacity of the LNG plant was 7.2 Mt/yr. The LNG plant comprised five trains, each of which was capable of processing 5.3 million cubic meters per day of gas, and three storage tanks that had a total capacity of 176,000 cubic meters. In February 2003, BLNG signed a contract with Kellogg Brown & Root International Inc. (a subsidiary of Halliburton Co. of the United States) to replace the old units with new Main Heat Cryogenic Exchange (MCHE) units. MCHE units are the largest and most sophisticated equipment in the LNG train for liquefying natural gas. BLNG placed an order for four new 100metric-ton spiral-wound aluminum MCHE units from Linde AG of Germany in March 2002 (BruDirect.com, 2003b§). In 2002 (the last year for which data were available), most of the LNG was exported to Japan (85.5%) and the Republic of Korea (11.6%). The major customers of the long-term contracts were Osaka Gas Co. Ltd., Tokyo Electric Power Co. Ltd., and Tokyo Gas Co. Ltd. of Japan (1993-2013) and Korea Gas Corp. of the Republic of Korea (1997-2013). In 2002, Brunei made its first spot delivery of LNG in small quantities to Spain and the United States (Poten.com, 2003§). Brunei’s economy and the mining sector will continue to be dominated by the oil and gas industry during the next 4 to 5 years. Because of the conflicts in the Middle East, the oil price in the world market is expected to increase. As a result, the export earnings from oil and gas are expected to rise, and the economy is expected to continue growing during the next 2 years. Brunei’s GDP is forecast to grow by 2.0% in 2004 and 1.6% in 2005 (International Monetary Fund, 2004a§). References Cited Oil & Gas Journal, 2003a, Worldwide look at reserves and production: Oil & Gas Journal, v. 101, no. 49, December 22, p. 46-47. Oil & Gas Journal, 2003b, Worldwide production: Oil & Gas Journal, v. 101, no. 49, December 22, p. 7.

Petroleum Economist, 2003, Banking on deep-water finds: Petroleum Economist, v. 70, no. 5, p. 16. Quazi, A.H., 1996, Development of non-metallic mineral resources in Brunei: Bandar Seri Begawan, Brunei, Ministry of Development (Brunei), Public Works Department, 71 p.

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