Brunei’s LegCo Debates the Future: Aspirations, Realities, and Challenges

By Malai Hassan Othman

BANDAR SERI BEGAWAN, 28 FEBRUARY 2025: The 21st Legislative Council (LegCo) session (Day 2) continued yesterday with intense deliberations over His Majesty’s titah, with members responding to key national concerns such as governance reforms, economic diversification, healthcare policies, and legislative ethics. 

While discussions reflected a commitment to progress, the session also exposed implementation challenges and lingering policy contradictions.

Governance Reform: More Sessions, Higher Expectations

One of the most significant announcements was the decision to increase LegCo sittings to twice a year. 

The intention is to enhance policy scrutiny and accelerate government decision-making. 

Members expressed optimism that this move will ensure more rigorous debate and oversight. 

However, concerns were raised regarding the ability of previous legislative sessions to address national priorities effectively. 

Some members highlighted the importance of evaluating past projects to determine their relevance and effectiveness moving forward. 

They noted that structured and open discussions with grassroots stakeholders were emphasised to ensure policies translate into tangible benefits. 

Members debated the government’s plan for enhancing legislative professionalism, particularly the introduction of a Legislative Code of Ethics to ensure transparency, professionalism, and accountability. 

Economic Diversification: Progress, But Challenges Remain

The government reported a 4.3% growth in the non-oil sector, signalling progress in efforts to diversify Brunei’s economy. 

The petrochemical industry, in particular, has emerged as a key contributor, with exports expanding to new markets such as Chile, Mozambique, Colombia, Peru, and Mexico. 

However, some members cautioned against overstating progress, emphasising that Brunei remains heavily dependent on oil and gas revenue. 

There was consensus that economic transformation requires greater investment in technology, upskilling of the workforce, and fostering innovation-driven industries. 

Members also highlighted the need to broaden diversification beyond petrochemicals, calling for more structured investments in agriculture, tourism, and logistics sectors.

Healthcare for Stateless Residents: A Bold Move with Complex Implications

His Majesty’s directive to extend free healthcare to stateless permanent residents was widely acknowledged as a compassionate and progressive policy. 

Members noted the humanitarian aspect of ensuring access to medical services for those who have lived in Brunei for generations. 

At the same time, concerns were raised over the long-term financial sustainability of this expansion. 

Questions emerged about whether the healthcare system is equipped to handle the increased demand and what measures would be in place to manage associated costs without burdening national resources.

Artificial Intelligence and Workforce Readiness

His Majesty’s call for embracing Artificial Intelligence (AI) and digital transformation was met with enthusiasm, with members acknowledging the potential of AI to drive economic growth. 

However, members also highlighted a critical gap in workforce preparedness. 

There were concerns about whether Brunei’s education system and training programs are adequately equipping local talent to take advantage of emerging AI-driven industries. 

One legislator called for greater AI literacy and investment in human capital development to ensure Bruneians can participate meaningfully in the tech economy.

Legislative Code of Ethics: Strengthening Accountability

The proposal for a Legislative Code of Ethics was another key topic. 

Members generally supported the initiative, recognizing its importance in ensuring transparency and professionalism among lawmakers. 

However, discussions also revealed concerns about how the Code would be enforced. 

Some members emphasised that ethics reforms must go beyond symbolic measures and should include concrete mechanisms for accountability.

Conclusion: A Session of Aspirations and Tough Questions

As the second day of the LegCo session concluded, members acknowledged the ambitious direction outlined in His Majesty’s titah. 

However, the debates also exposed critical questions about execution, sustainability, and the effectiveness of governance reforms.

In a Nutshell: Key Takeaways from Yesterday’s Debate:

• Economic diversification showing progress, but oil dependency remains a concern.

• Calls for expansion beyond petrochemicals, with investments needed in agriculture, tourism, and logistics.

• Free healthcare expanded to stateless residents, with sustainability challenges.

• AI and digital transformation are emphasized, but workforce readiness is questioned.

• Legislative Code of Ethics was introduced, with concerns over enforcement mechanisms.

• LegCo sittings doubled, with expectations of greater legislative impact.

Brunei’s policymakers have set ambitious goals, but as discussions underscored, policy success is determined by effective execution and tangible improvements in citizens' lives. (MHO/02/2025)

 

Brunei’s Legislative Council: Will the 21st Session Deliver More Than Promises?

By Malai Hassan Othman

BANDAR SERI BEGAWAN, 27 FEBRUARY 2025: As the 21st session of Brunei’s Legislative Council (LegCo), unfolds, expectations are high - will this session bring tangible progress, or will familiar challenges persist?

Looking back at the 20th session in 2024, His Majesty Sultan Haji Hassanal Bolkiah issued a clear message: governance must improve, economic strategies must be effective, and policies must deliver real benefits. 

Inside the chamber, the discussions were rigorous and reflective. Outside, the public awaited results. Policies were tabled, yet many still wonder - have these initiatives translated into meaningful impact? 

LegCo members debated national spending, economic diversification, and employment, policies, with some raising concerns over the pace of implementation and administrative efficiency. 

Some lawmakers highlighted delays in execution, emphasising that policies must be swiftly and effectively implemented to meet the nation’s evolving needs.

Brunei’s economic diversification efforts have shown some progress, with the non-oil and gas sector contributing 4.3% annual growth since 2017, but challenges remain in ensuring broader financial stability. 

Meanwhile, concerns over rising living costs, unemployment, and financial stability remained central to discussions, particularly for middle-income families balancing daily expenses. 

Even promising initiatives - such as digital transformation, food security, and investment in new industries were met with calls for clearer timelines and measurable outcomes. 

“The public’s expectations are clear - they want to see progress,” noted one LegCo member, echoing the broader sentiment among lawmakers.

With Brunei’s 2024/2025 budget allocating BND 5.96, billion, much focus is placed on enhancing economic resilience, job creation, and strengthening local industries. 

Now, as the 21st LegCo session progresses, members face renewed responsibility: Will they translate discussions into action, or will progress remain gradual? 

For Bruneians, this session represents an opportunity to strengthen policies, address pressing concerns, and pave the way for sustainable national growth. 

With national transformation at a critical juncture, LegCo must ensure that this session does more than just debate - it must drive action that secures Brunei’s future. (MHO/02/2025)

 

Brunei's Bold Reforms: Free Healthcare for Stateless Residents, Legislative Overhaul, and Economic Diversification

Brunei is making bold moves! Free healthcare for stateless residents, more legislative sittings for stronger governance, and a push for economic diversification. But will these policy shifts spark real transformation, or will challenges hold them back?

By Malai Hassan Othman

BANDAR SERI BEGAWAN, 27 FEBRUARY 2025: In a significant policy shift, His Majesty Sultan Haji Hassanal Bolkiah Mu’izzadin Waddaullah, the Sultan and Yang Di-Pertuan of Negara Brunei Darussalam has granted permanent residents without Bruneian citizenship the same free medical and health services as citizens. 

This groundbreaking decision marks a pivotal moment in Brunei's healthcare landscape, ensuring that stateless individuals are no longer excluded from essential medical care. 

"Beta juga memperkenankan bagi Kementerian Kesihatan untuk mengemaskini dasar caj perkhidmatan yang sedia ada bagi Penduduk Tetap yang tidak mempunyai taraf kewarganegaraan (stateless) untuk diberikan kemudahan perkhidmatan kesihatan sepertimana yang diberikan kepada warganegara Brunei Darussalam," declared His Majesty during the opening of the 21st session of the Majlis Mesyuarat Negara. 

This announcement sent ripples through the nation, with many praising the move as a bold step towards inclusivity. 

Stateless individuals in Brunei have faced financial hurdles in accessing healthcare for years. 

The new directive not only eliminates these barriers but also reinforces the nation’s commitment to social welfare and public health. 

A Long-Awaited Reform for Stateless Communities

Brunei is home to thousands of stateless residents, many of whom have lived in the country for generations. 

Despite their deep-rooted ties, they have long been ineligible for various government benefits, including free healthcare. The latest reform signals a shift in policy - one that acknowledges their contributions and ensures their well-being. 

For individuals like Alice, a 54-year-old permanent resident who has struggled with high medical costs due to her stateless status, the new policy is life-changing. 

“This is a huge relief for people like me. Healthcare was always a worry,” she said. 

Healthcare professionals also view this as a win for public health. 

"By removing financial obstacles, we can encourage early medical intervention and preventive care," said a local doctor, emphasising the benefits of universal healthcare access. 

Legislative Council to Convene Twice a Year

Another major announcement from His Majesty was the decision to increase the frequency of Legislative Council (Majlis Mesyuarat Negara) sittings to twice a year, rather than the previous once-a-year format. 

This change is expected to enhance the effectiveness of legislative discussions, allowing policymakers to address pressing national issues more promptly and thoroughly. 

The move signifies a stronger commitment to governance, transparency, and responsiveness. 

By holding two sessions annually, legislators will have more opportunities to debate policies, refine strategies, and make timely decisions for the nation's welfare. 

His Majesty also highlighted the importance of a Code of Ethics for members of the Legislative Council, ensuring integrity and professionalism in executing their duties. 

In the coming weeks, the Legislative Council will convene under this new format, allowing for a deeper review of national policies and fresh discussions on urgent matters. 

Among the key priorities set to dominate discussions are budget allocations and fiscal planning, ensuring strategic investments that drive economic diversification, strengthen public welfare, and promote sustainable development. 

Observers anticipate that discussions will focus on optimising resource distribution to support Brunei's long-term economic resilience and social stability. 

However, beyond procedural changes, the real test lies in whether these more frequent sittings will lead to more impactful governance. 

Will they facilitate meaningful reforms that address the root causes of economic stagnation and social challenges? Or will they remain mere formalities with little tangible effect? 

The coming weeks will reveal whether these legislative adjustments will truly transform Brunei’s political and economic landscape. 

Economic Growth, Industrial Expansion, and Energy Transition

Beyond healthcare, His Majesty's Titah addressed Brunei’s economic diversification and the need to accelerate industrial expansion. 

Insya Allah, we will continue driving economic growth through new economic activities such as the production of Petroleum Intermediate Derivatives, which will generate additional activities in the downstream oil and gas sector. 

The goal is to position Brunei as a hub for the chemical, manufacturing, and food sectors while exploring energy transition initiatives towards a sustainable environment. 

At the microeconomic level, His Majesty emphasised the importance of stimulating more economic and tourism activities in Brunei, ensuring positive spillover effects for local entrepreneurs and businesses. 

The commitment remains to broaden economic participation to ensure that growth is not limited to large industries but extends to small and medium enterprises (SMEs). 

Notably, efforts to reduce reliance on oil and gas have started to bear fruit. 

The non-oil and gas sector recorded a 4.3% annual growth between 2017 and 2023. 

New trade routes to Chile, Mozambique, Colombia, Peru, and Mexico have opened doors for Brunei’s exports, showing the nation’s expanding global reach. 

The petrochemical industry has also emerged as a major economic driver, with contributions rising dramatically from BND 136 million in 2017 to BND 1.24 billion in 2023. 

This surge highlights the success of Brunei’s industrial diversification strategy. 

“We are seeing the rewards of our efforts, but there’s more to be done,” His Majesty reminded the nation. 

While economic progress is evident, he stressed the need for continuous innovation across sectors like agriculture, tourism, education, and artificial intelligence. 

Technology and the Future: Embracing AI

His Majesty also highlighted the ongoing technological revolution, particularly Artificial Intelligence (AI), which presents vast new opportunities. 

However, Brunei must strengthen human capital and national capabilities to fully capitalise on these advancements. 

Without continuous investment in skills development and digital infrastructure, AI risks becoming an untapped resource instead of a transformative force for the economy. 

He called for the nation to harness AI’s potential while simultaneously strengthening human capital to ensure technological advancements benefit the broader economy. 

“Artificial Intelligence opens new doors for us. But we must prepare our workforce to adapt,” His Majesty stated, underlining the importance of skill development in Brunei’s digital transformation. 

Yet, the question remains - how prepared is Brunei’s workforce to take on this challenge? 

Without proper training and infrastructure, AI advancements may remain untapped potential rather than a transformative force. 

A Vision for Wawasan 2035

As Brunei continues its journey towards Wawasan Brunei 2035, the road ahead demands collaboration, innovation and resilience. 

His Majesty stressed that every proposal and idea put forth in the Legislative Council should be carefully examined, taking into account emerging global challenges to ensure their relevance and effectiveness. 

Strategic governance and forward-thinking policies will be crucial in navigating the evolving economic landscape and securing a prosperous future for all Bruneians. 

His Majesty emphasised unity, innovation, and strategic planning as key factors in achieving national aspirations. 

He called for honest discussions, creative thinking and strategic actions from policymakers and citizens alike. 

Brunei stands at a crossroads - on one side, economic transformation, and on the other, a commitment to social equity. 

The latest healthcare decision, coupled with ambitious economic reforms, showcases the country’s drive to ensure progress that benefits all segments of society. 

With the foundation laid for a more inclusive future, Bruneians now look ahead with renewed hope. 

But as the nation moves forward, will these policy shifts translate into meaningful change, or will they be overshadowed by entrenched challenges? 

The coming months will determine whether Brunei’s vision for sustainable growth and governance will become a reality or remain an aspiration. (MHO/02/2025)

 

Little Napoleons and Red Tape: Is Brunei’s Public Service Failing the People?

By DMAO

BANDAR SERI BEGAWAN – Once hailed as the backbone of Brunei’s governance, the country’s public service now faces an unsettling reality: the slow erosion of its founding principles. 

The ideals that once guided civil servants—good governance as a form of worship (Ibadah) and a source of blessings (Berakah) - are fading, leaving a system increasingly detached from its moral and historical foundations. 

At the heart of this concern is the Institut Perkhidmatan Awam (IPA), an institution once dedicated to shaping Brunei’s civil servants with a deep sense of duty and ethics. 

However, those who walk down the halls - where the walls seem to speak - say its purpose feels more ceremonial than transformative. 

The once-prominent messages reminding officers of their role as stewards of the people have been taken down, replaced by an environment that critics argue has become more bureaucratic than service-oriented.

What Happened to ‘Good Governance as Ibadah and Berakah’?

For decades, Brunei’s public service was built on the philosophy of Melayu Islam Beraja (MIB), a governance model that intertwines Malay culture, Islamic teachings, and monarchical authority. 

Civil servants were not just employees of the state; they were caretakers of public trust, guided by ethical governance and spiritual responsibility. 

Yet, insiders and former civil servants now say that this sacred duty has been reduced to routine administrative work. 

“There was a time when we saw our work as part of a larger, divine purpose,” said a retired senior officer. 

“Today, it’s just about processing paperwork.” 

This shift has not gone unnoticed; some officials quietly admit that Brunei’s public service, once revered for its discipline and integrity, is now more focused on hierarchy and red tape than on real service to the people. 

The disconnect between public officers and the community is growing, and with it, trust in the system is eroding.

Where is the Leadership?

Part of the problem, according to governance experts, is a lack of continuity in leadership and training.

The late Sultan Omar Ali Saifuddien III’s Syair – Pelembagaan - a poetic doctrine emphasising inclusive governance and civic duty - was once a cornerstone of training programs. 

Today, it is largely absent from the curriculum. 

“Young civil servants today barely know about Syair Pelembagaan,” says a governance researcher. 

“If they don’t understand the philosophy behind their role, how can they uphold its principles?” 

Another concern is the disengagement of contract officers, consultants, and advisers, many of whom are not rooted in Brunei’s governance traditions.

Critics argue that while expertise is essential, these officials must also be aligned with the nation’s founding values, not just employed for technical skills.

A Mindset Shift: Embracing Ibadah, Berakah, and Adil Laila Bahagia in Governance

The principles of Ibadah (worship through service), Berakah (blessings from ethical governance), and Adil Laila Bahagia (justice that leads to peace and happiness) are deeply embedded in Brunei’s governance philosophy. 

When civil servants internalise these principles, it transforms their mindset, urging them to serve not just as administrators but as custodians of public welfare. 

The phrase “Always in service with the Guidance” reflects this very idea - governance is more than a duty; it is a sacred responsibility. 

Public officers who embrace this philosophy view their work as an act of devotion, fostering greater accountability, commitment, and service excellence. 

However, as this ethos weakens, a bureaucratic mindset takes over, focusing more on process than meaningful impact. 

This mindset must shift toward processes, procedures, and projects - not just paperwork. 

Governance should be about tangible outcomes that improve people’s lives rather than being entangled in excessive documentation and redundant approvals.

Action-Oriented Leadership: The Lost Foundation

In the past, action-oriented leadership was the foundation of public service in Brunei. 

This leadership model was not only about efficiency but was also aligned with Islamic principles and guidance related to Khalifah, Ibadah, and Ummah. 

It was a structured program designed to ensure that public officers not only understood governance but also carried out their duties with purpose and accountability. 

However, over time, this approach has faded, leaving behind a bureaucratic culture that emphasises processes over outcomes.

Adil Laila Bahagia: Justice in Governance

The concept of Adil Laila Bahagia - justice that leads to peace and happiness - underscores the need for fairness in governance. 

Policies and services must be executed with integrity, ensuring equity and well-being for all citizens.

Without justice, governance becomes disconnected from the people it is meant to serve. 

A public servant embracing Adil Laila Bahagia prioritises fairness in policy execution, accessibility of services, and responsiveness to public needs. 

This ensures that governance is not just efficient but also compassionate and balanced, creating harmony within society.

Symbols of Governance: A Reflection of Ibadah and Berakah

Brunei’s national emblem and national anthem, both symbols of governance built on divine guidance, reflect the philosophy of Ibadah and Berakah in leadership. 

The Malay translation of the Arabic phrase inscribed on the emblem, Ad-Dā’imūn al-Muḥsinūn bil-Hudā (Yang Kekal, yang Berbuat Baik, dengan Petunjuk), reinforces the principle of permanence, righteousness, and guidance in governance. 

This inscription is not a mere formality but a reminder that leadership must always be anchored in ethical responsibility, divine direction, and service to the people.

The Bureaucratic Trap: How Little Napoleons are Strangling Public Service

Without strong ethical grounding, bureaucracy is taking over, and in its shadows, a troubling phenomenon has emerged - Little Napoleons. 

These mid-level bureaucrats, empowered by excessive red tape, have found ways to exploit their positions, wielding disproportionate control over decisions, approvals, and processes. 

The system has become increasingly rigid, with more focus on processes than on outcomes that benefit the people.

Is There a Way Back?

Experts say there’s still time to reinvigorate Brunei’s public service, but addressing the Little Napoleons problem is crucial. 

Leadership must enforce clear accountability mechanisms, such as performance reviews, public feedback channels, and direct intervention from senior officers, to rein in those who abuse their roles. 

Without tackling this issue, public service will remain inefficient, benefiting only those who manipulate the system to their advantage. 

Governance thinker John Adair’s Action-Centered Leadership offers an approach that could complement Brunei’s Islamic values. 

Adair’s model - focusing on task, team, and individual leadership - could align well with Brunei’s Khalifah (stewardship), Ummah (community), and Ibadah (service as worship) framework.

A Call for Renewal

Brunei’s governance system has long been a model of stability, but stability without purpose can lead to stagnation.

The nation’s founding governance principles must not be revived - not just for nostalgia but for the survival of a trusted and effective public service. 

The question remains: will those in power take action before it’s too late?

 

No Safety Net: The Harsh Reality of Gig Work in Brunei

By Malai Hassan Othman

No Job? No Benefits? No Safety Net?

As unemployment rises and job vacancies shrink, thousands of Bruneians - including fresh graduates - are turning to the gig economy just to survive. 

They drive, deliver, freelance, and hustle in a system that thrives on flexibility but offers no protections.

No pension. No health coverage. No job security.

Highly skilled professionals are stuck in low-paying, unstable gigs.

Dart drivers, online sellers, wedding photographers - what happens when the work dries up?

While other countries have stepped up to protect gig workers, Brunei remains silent. How long can this shadow workforce survive before the cracks start to show?

Read the full investigation now. 

BANDAR SERI BEGAWAN – Before the sun rises, they check their phones for assignments and set out across Brunei - some on motorcycles delivering meals, others glued to their laptops completing freelance work. 

They are Brunei’s gig workers - a workforce largely invisible, unprotected, and growing.

As unemployment rises and fresh graduates flood the job market with no jobs in sight, many Bruneians are turning to gig work to make ends meet. 

Whether by choice or necessity, they have become part of a shadow economy that keeps the country running but lacks recognition, protection, or financial security.

A Generation Without Guarantees

For 26-year-old Hakim, who graduated two years ago with an engineering degree, the dream of a stable job in a major corporation has faded. 

“I’ve applied to more than 50 jobs. No calls, no interviews. Only rejection emails,” he says. “I can’t sit around and wait.”

Before turning to gig work, Hakim had aspirations of working as an engineer, utilizing his degree to build a stable career. 

However, with limited job opportunities, he now drives for Dart and makes deliveries for GoMamam. 

On a good day, he earns BND 50 to BND 80 - but with fuel, maintenance costs, and commission fees, his take-home pay shrinks significantly. 

“Some days I wonder if it’s worth it,” he says. “But what other choice do we have?”

Hakim is not alone. The youth unemployment rate in Brunei was 9.25% in 2019, with 28.4% of the unemployed being young people. 

A 2023 labor force report estimates that over 82,700 Bruneians are working in the informal economy, a significant portion of whom are gig workers. 

Many are highly educated, struggling to find stable employment in a job market that is not expanding rapidly enough.

A Shift in Work Preferences: Millennials & Gen Z Embrace the Gig Economy

Unlike previous generations, Millennials and Gen Z workers are increasingly drawn to gig work for its flexibility, autonomy, and income potential. 

According to Digital Brunei’s report on the gig economy, young workers prefer multiple income streams over traditional 9-to-5 jobs. 

However, this choice comes with risks - no financial safety net, no structured career progression, and income instability.

At the same time, small businesses and startups in Brunei benefit from gig workers by avoiding long-term hiring commitments. 

Companies like Dotroot and GoMamam rely on freelancers and contract workers to lower operating costs while scaling their businesses. 

This shift means more people are turning to the gig economy but without formal protections or rights.

The Global Market: Bruneian Gig Workers Compete Beyond Borders

While Brunei’s local job market remains limited, gig workers are tapping into global freelancing platforms like Upwork, Fiverr, and Sribuza. 

Many Bruneian digital workers offer services internationally, providing graphic design, content writing, and tech support to clients overseas. 

However, without official recognition as a legitimate workforce, these freelancers struggle to access financial services, business loans, or long-term savings plans.

A Freelancer’s Perspective: The Wedding Photographer’s Struggle

For Zul, a freelance wedding photographer and videographer, the gig economy is both a lifeline and a challenge.

“There are peak seasons when I earn good money—weddings, engagements, big events. But in between, there are long dry spells where I struggle to get clients,” he says.

“Unlike salaried workers, I don’t have a stable income. There’s no pension, no savings plan. Everything depends on me.” 

To manage the financial instability, Zul takes on side jobs in videography, social media content creation, and corporate event photography. 

“I have to diversify my income streams just to survive,” he explains. “I also try to save up from big projects, but without a structured pension plan, I worry about the future.”

Zul also points out the lack of financial support for freelancers, saying, “If I want to upgrade my camera gear, I can’t even apply for a small business loan because I don’t have a fixed income or a registered business.” 

His experience reflects a larger issue in Brunei’s freelance sector, where many workers cannot access financial aid or long-term benefits due to their informal status.

How Other Countries Are Responding

Brunei is not alone in facing this issue. Singapore has announced plans to require gig platforms to contribute to workers' retirement funds by 2024. 

Malaysia has expanded SOCSO protections to gig workers, ensuring they receive injury and health coverage. 

The UK has ruled that gig workers are entitled to minimum wage and paid leave.

While Brunei has yet to introduce comprehensive policies for gig workers, previous discussions around labour market reforms have acknowledged the growing role of freelancing and digital employment. 

However, no concrete policies or protections have been implemented, leaving gig workers in a precarious position.

As the workforce continues to grow, the question is no longer if the government should act but when.

A Call for Change

Many gig workers are not asking for full employment benefits - they know that gig work thrives on flexibility. 

What they do want is basic protections: access to TAP and SCP, health insurance options, and a transparent pay structure that prevents exploitation.

A government official, who requested anonymity, acknowledged the issue, stating, “We recognise that gig workers play an increasing role in Brunei’s economy, and discussions are ongoing on how best to integrate them into the labour protection framework.”

However, no timeline for policy implementation has been set.

“There needs to be a way to make gig work sustainable,” says Hakim. “If this is the future of work, we should not be left behind.”

For now, gig workers continue to hustle, navigating an economy that relies on their labour but fails to acknowledge their worth. 

As more Bruneians enter the gig workforce, the country faces a choice: regulate, protect, and integrate gig workers into the economy - or ignore them until it’s too late. (MHO/02/2025)

 

 

Brunei Seeks Investors to Revive Its Struggling Oil & Gas Sector

"With oil production plummeting by nearly 40% since its peak, Brunei faces a critical energy crossroads. Can its first offshore licensing round in over a decade attract investors, or will aging infrastructure and fiscal barriers push them elsewhere? The world is watching as the Sultanate fights to secure its energy future."

By Malai Hassan Othman

 

BANDAR SERI BEGAWAN, FEBRUARY 2025: Brunei’s offshore energy sector is at a defining crossroads, with crude oil and natural gas accounting for over 60% of government revenue.

 

The sector has seen a steady decline, with crude oil production dropping from 221,000 barrels per day in 2006 to just 73,000 barrels per day by early 2024, raising urgent concerns about the sustainability of the industry.  

 

The first offshore licensing round in over a decade is a pivotal attempt to reverse this trend and reignite investment in the industry.  

 

With hydrocarbon reserves declining and competition from regional players intensifying, the government hopes this move will inject new capital and technological expertise. But will investors take the bait?

 

“Brunei has enormous potential, but its fiscal and regulatory framework needs urgent modernization to stay competitive,” said a Wood Mackenzie energy analyst. 

 

"The government must move quickly to adapt, as investors are increasingly drawn to more favorable energy markets in Southeast Asia." 

 

“Neighboring countries like Malaysia and Indonesia have implemented strategic adjustments to attract investment, and Brunei must do the same to remain relevant in the regional energy market.”

 

While Malaysia and Indonesia have streamlined their fiscal regimes to encourage foreign investment, Brunei’s multi-layered taxation system and complex contract structures remain a significant barrier. 

 

His Majesty Sultan Haji Hassanal Bolkiah has repeatedly emphasised the need for strong leadership, transparency, and modernisation in the oil and gas sector, yet the pace of policy reforms has been slow. 

 

Investors will be closely watching whether the government introduces more attractive incentives, as global exploration companies now have multiple options for investment in the region.

 

Specific data on the proven reserves within Blocks A and D is not publicly available. 

 

These blocks are strategically located offshore Brunei Darussalam, near existing fields such as Ampa, Fairley, Osprey, Champion, Iron Duke, and Maharajalela Jamalulalam. 

The proximity to these established fields suggests potential hydrocarbon presence, but detailed reserve estimates would require exploration and appraisal activities to determine accurately.

 

Shell’s absence from this licensing round raises critical questions about the commercial viability of Blocks A and D. 

 

TotalEnergies’ recent divestment of its Brunei assets to Malaysia’s Hibiscus Petroleum for $259 million further reflects growing concerns among foreign investors about the sector’s stagnating production levels and limited innovation.  

 

Some industry analysts suggest that these blocks may not align with Shell’s stringent return-on-investment (ROI) criteria, prompting the company to focus on other assets.

 

"Operators today have options, and they are looking at jurisdictions that balance profitability with regulatory transparency," noted an industry expert. 

 

"Brunei’s existing fiscal structure must be re-evaluated, or it risks missing out on global exploration capital that is flowing into markets with more investor-friendly terms." 

 

Malaysia and Indonesia have revised their profit-sharing models and tax structures, making their markets far more competitive than Brunei’s. If Brunei does not adapt its fiscal policies, it risks losing out to more attractive investment destinations.

 

Many of Brunei’s offshore facilities were built decades ago, requiring significant maintenance and upgrades. 

 

For potential investors, the question is whether the existing infrastructure is a boon or a burden. 

 

While proximity to operational facilities theoretically lowers costs, the extent of necessary upgrades could make projects costlier than anticipated.

 

Without addressing these fiscal and operational barriers, Brunei risks failing to attract high-caliber bidders. 

 

The International Energy Agency (IEA) stresses that nations reliant on fossil fuels must transition toward cleaner energy sources to maintain long-term economic stability and meet global climate targets. 

 

Brunei’s hesitancy in adopting advanced technologies and sustainable practices has made the sector less competitive compared to regional counterparts. 

 

This could have long-term repercussions on production sustainability and revenue generation, making it imperative for the government to introduce competitive incentives. 

 

Providing fiscal flexibility, reducing bureaucratic hurdles, and engaging with industry stakeholders to tailor contract terms could significantly enhance Brunei’s appeal.

 

A successful licensing round could revitalise Brunei’s economy, bringing new employment opportunities and boosting local businesses. 

 

The oil price recovery in 2024, with average prices climbing to $88.89 per barrel, offers a timely opportunity for Brunei to attract investors and reinvest in its energy infrastructure. 

 

However, industry experts emphasise that attracting investors alone is not enough - modernisation, diversification, and sustainable energy investments are crucial for the sector’s long-term survival. 

 

With increased exploration and production, engineers, geologists, and offshore workers stand to benefit from new job openings, while local vendors in equipment supply, logistics, and support services could see significant growth. 

 

Additionally, expanded training programs for young professionals could strengthen the local talent pool, ensuring Brunei remains competitive in the energy sector.

 

This licensing round represents a pivotal moment for Brunei’s energy future. 

 

While it offers opportunities for economic expansion and energy security, the challenges of fiscal competitiveness and infrastructure readiness cannot be ignored. 

 

The government’s ability to adapt and align policies with global industry trends will ultimately determine whether Brunei strengthens its regional presence or struggles to secure the necessary investments.  (MHO/02/2025)