ASEAN KEY DESTINATIONS
Long term investments keep oil and gas sector resilient
BRUNEI’s upstream oil and gas activities remain ‘resilient’ in the face of low oil prices because of constant investment with a long term view, the energy and industry minister said in a recent interview with the Oil and Gas Year Brunei 2015 report.
“The government fully understands the upstream environment is both technically and commercially challenging, more so in the face of oil price volatility,” said Yang Berhormat Pehin Datu Singamanteri Colonel (Rtd) Dato Seri Setia (Dr) Hj Mohammad Yasmin Hj Umar in the report.
Responding on how the government encourages upstream, or the production and exploration activities in the oil and gas sector, YB Pehin Dato Seri Setia Hj Mohd Yasmin said resilience of upstream activities, or continued oil and gas production in the face of oil price volatility can be credited to “constant investment with the long term in mind rather than the short term”.
He said Brunei ensures that the reserve-replacement ratio of oil is more than one, so that reserves remain untouched.
“Even with the volatility of oil prices, some businesses have gone ahead with projects and investments as our focus is on the long term growth and development,” he said.
The minister said the companies’ decision to carry on with projects despite low oil prices show they are committed to the growth of Brunei’s energy sector.
“Brunei is commited to continuing investment in the upstream sector,” he said.
YB Pehin Dato Seri Setia Hj Mohd Yasmin said the Energy and Industry Department under the Prime Minister’s Office encouraged companies to keep technical costs low through proper contract management, higher productivity and using advance technology for drilling and production.
He said the continuous engagement and consultations with upstream operators help identify incentives to accelerate or increase exploration and development activities.
“For example, by speeding up the maturation process, adopting innovative ideas and implementing new but proven technologies - are also part of the incentives for exploration and production,” he said.
He said government oversight to ensure safety standards are up to par with international and industry standards encourage exploration and production activities. The oil and gas production has been core of the sultanate’s economy ever since its discovery in Seria in 1929.
“It (oil and gas sector) provided employment to about 26,000 people in 2014,” he said and added that it remains integral to achievement of objectives set out in Wawasan 2035.
“To ensure that the energy industry continues to contribute to Brunei’s sustainable development, we aim to strengthen and grow upstream and downstream activities and these efforts are reflected in the government goals,” he said.
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