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Brunei Darussalam : Energy Overview

Location map of Brunei

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Located in Southeast Asia, bordering the South China Sea and Malaysia, Brunei is geographically divided by Malaysia into 2 unconnected parts. Brunei has an area of 5,765 square kilometers. Administratively, it is divided into four districts and namely Brunei-Muara, Tutong, Belait and Temburong. The capital city, Bandar Seri Begawan, is located in the Brunei-Muara districts and is where the government operations and major business activities take place.

The population of Brunei is 390 thousand as of 1 July 2007 with a growth rate estimated at 1.8 percent from previous year.

Economy of Brunei is almost totally supported by exports of crude oil and natural gas, with revenues from the petroleum sector accounting for over half of GDP. The GDP at Current market Prices reached US$ 12,317 Million in 2007, or 0.6 percent hiked compare to 2006. It’s equal to US$ 31,582 of GDP per Capita at Current market Prices that makes this country become the 2nd highest per capita incomes among ASEAN countries after Singapore.

The Total Primary Energy Supply (TPES) has increased by 41 percent in 2003 as compared to 2000. In 2005, Brunei Darussalam’s primary energy requirements were around 2,435 KTOE, with oil and gas as its only energy sources. Natural gas accounted for the highest percentage share of the total final energy requirement with 75.6 percent with the remaining having been supplied by oil.

The Total Energy Final Energy Consumption (TFEC) had an increasing trend of 10 percent from the year 2000 to 2003. Power generation increased by 12 percent in 2003 compared to 2000. In 2005, Brunei Darussalam’s total final energy consumption (TFEC) was 719 KTOE. The transport sector was the largest consumer accounting for 56.2 percent (404 KTOE) of TFEC. This is followed by the residential/commercial with 32.8 percent (236 KTOE). Brunei Darussalam’s industry sector accounted for 11.0 percent (79 KTOE) of TFEC.

Brunei Darussalam implements five-year economic development plans known as the National Development Plans. Currently, the ninth National Development Plan (2007–2012) is in force. In line with this plan, Brunei Darussalam is also embarking on its long-term development plan called Wawasan 2035 to achieve its industrialization and economic diversification aspirations. Energy, a crucial necessity in the sustainable development of Brunei Darussalam, must meet the needs of today and the future without adverse effects to the environment.

As Brunei has abundant resource of Oil and Natural Gas, for a long time, Brunei Darussalam’s energy policy is centered on its oil and gas industry.

In 1981, the Oil Conservation Policy was introduced. The policy aimed to prolong the life of the economy’s oil reserves.

In 2000, the Brunei Natural Gas Policy (Production and Utilisation) was introduced. The policy aimed to maintain gas production at 2000 rates in order to adequately satisfy export obligations. It aimed to open new areas for exploration and development, and encourage increased exploration by new and existing operators. Under the policy, priority is always given to domestic utilisation of gas, especially for electricity generation.

The Brunei National Petroleum Company Order, introduced in January 2002, empowers the Brunei National Petroleum Company Sdn Bhd (PetroleumBRUNEI) to act as the economy’s oil company. Among others, PetroleumBRUNEI is given designated areas for which the company has the right to negotiate, conclude and administer petroleum sharing agreements.

In August 2007, BD ratified the United Nation Framework Convention on Climate Change (UNFCCC) and subsequently ratified its Kyoto Protocol on 20th August 2009.

Until today, Brunei does not currently have a dedicated policy framework for renewable energies. The current regulatory framework for the electricity sector dates back to 1973, with the Electricity Act, and its subsequent amendment in 2002.

Brunei Darussalam basically depends totally on fossil fuels for its energy needs. The efficient use of fossil fuel has been recognized as the most cost-effective measure in mitigating emissions of greenhouse gas and to prolong the fossil fuel reserve. Increasing energy efficiency also contributes towards better air quality, reduction in energy costs, and moderating the growth in energy consumption.

Brunei Darussalam has a national target on the reduction of national energy intensity at 25 per cent by 2030 (with 2005 as the base year), which is in line with the pledges by APEC leaders in the 2007 Sydney Declaration.

EE&C initiatives have been developed in Brunei Darussalam to:

• Promote public awareness and encourage the adoption of energy-efficient technologies and best practices;

• Establish and develop Energy Efficiency & Conservation regulations and guidelines to encourage energy efficiency and conservation practices;

• Improve energy efficiency in the supply, transportation and utilization of energy;

• Develop energy efficiency labelling and standards to encourage procurement of energy-efficient appliances; and

• Strengthen collaborations with local and international institutions to develop and enhance human capacity building to sustain energy efficiency efforts.

As part of Brunei’s Wawasan (Vision) 2035, a national energy efficiency study is being prepared by the Mitsubishi Corporation. In addition, a “Handbook on Energy Management” has been produced by the Energy Division of the Prime Minister’s Office, detailing strategies for improving public and private-sector energy efficiency.

Brunei Darussalam recognizes the importance in ensuring energy security and environmental sustainability in fueling the economic growth. Environmental policy directions are embedded in the 2035 Long Term Development Plans, which includes amongst others:

• Implementing the highest environmental standards for existing and new industries in accordance with established international standard and practices.

• Strictly enforcing appropriate regulations regarding the maintenance of environment that affect public health and safety.

• Supporting global and regional efforts to address trans-border and regional environmental concerns.

References:

Website of Energy Division Prime Minister’s Office of Brunei Darussalam

The 3rd ASEAN Energy Outlook, ACE-IEEJ, 2011.

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