By Malai Hassan Othman
BELAIT, 03 JUNE 2025: A quiet exodus is underway at Brunei Shell Petroleum (BSP). More than 200 employees have taken generous early retirement packages, sparking a wave of farewell posts on social media.
This isn’t a routine wave of retirements. It’s a strategic move to cut Operating Expenditures (OPEX) - including salaries, asset upkeep, and operational overheads. With oil prices hovering between $60 and $65 per barrel, BSP is under pressure to stay financially viable while managing ageing fields and declining output.
In 2006, Brunei produced over 221,000 barrels of crude oil per day. By 2023, that number had dropped to 93,000, and declined further to 73,000 by early 2024. This steep fall suggests more than natural depletion. It signals a sector running on fumes, weighed down by legacy expectations but struggling to chart a new path forward.
Insiders confirm that the “golden handshake” is part of a broader restructuring.
While BSP has not publicly detailed the package, multiple employees described it as a well-compensated exit plan, reportedly including lump sum payouts, pension incentives, and transition support.
The uptake, involving over 200 staff, suggests it was financially attractive and timely for those considering early retirement.
Subcontractors have also let go of staff, while some projects have been scaled back or quietly shelved.
“The writing’s on the wall,” said a former BSP engineer now in Oman. “They’re not just trimming fat - they’re preparing for a leaner future.”
Cost-cutting is not new for BSP, but the speed and scale this time suggest deeper concern. Several high-cost projects have been postponed or downsized.
Subcontractors report reduced budgets. Even strong-performing departments are being reorganised.
“At this stage,” remarked one expert in the industry, “they’re not just shedding weight - they’re offloading baggage to avoid sinking.”
This isn’t just a corporate matter. Brunei still relies on oil and gas for more than 90% of its revenue.
Any shift in BSP sends shockwaves through the entire nation. Public services, including health, education, welfare, and civil servant salaries, all depend on income from BSJV. If that flow dries up, tough choices lie ahead.
And dry up, it might. Oil prices now average between $60 and $65 per barrel, down from peaks of nearly $89 in mid-2024.
This decline has hit national revenue hard and put added strain on BSP’s profitability. Even a small dip in oil prices now creates outsized effects on the nation’s budget.
Privately, there have been internal discussions within BSP about the urgency to reduce spending to extend the life of Brunei’s maturing oil fields.
While not publicly disclosed, one internal analysis suggests that if current spending patterns continue, the field life could end by 2029.
However, with significant cost savings - between 20% and 40% - the lifespan could be stretched well into the 2030s.
This underscores the motivation behind recent transformation efforts, including workforce restructuring and operational cutbacks.
Part of the reason oil prices are under pressure is global trade tension. U.S. tariffs introduced during Donald Trump’s presidency affected many Asian economies.
These tariffs slowed growth and reduced industrial activity, cutting oil demand worldwide. The result: falling prices that further squeezed oil-producing countries like Brunei. A few dollars off per barrel translates to millions in lost income.
Meanwhile, foreign investors are pulling out. In 2024, TotalEnergies sold its Brunei assets to Malaysia’s Hibiscus Petroleum for $259 million, citing high costs and a lack of innovation.
Petronas is still trying to make the Kelidang Cluster work. Touted as Brunei’s future gas saviour, the project is expensive, delayed until 2026, and struggling with compatibility issues at BLNG.
Locally, sentiments are shifting. “Shell isn’t what it used to be,” said a Seria resident.
“They’re cutting back instead of building forward.”
Many compare the current approach to riding a dead horse - refusing to pivot while clinging to outdated methods.
The metaphor resonates. Brunei’s energy strategy can’t revolve around savings alone. It needs reinvention through modernisation, diversification, and bold reforms.
Morale within BSP is slipping. Staff say it’s no longer about excellence but about meeting restructuring targets.
Skilled Bruneians are migrating to Qatar, Abu Dhabi, and Saudi Arabia. The brain drain is real - and accelerating.
But the deeper concern isn’t who’s leaving. It’s what’s left behind.
Brunei’s repeated pledges to diversify its economy have yet to bear real fruit. Outside of oil, few industries can match its income, stability, or national importance.
Without serious investment in renewables, digital industries, or other value-added sectors, Brunei risks being left with neither oil nor a viable alternative.
As one Reddit user put it: “We built our castle on a barrel. Now it’s leaking.”
The government now faces a choice: to adapt and prepare for a world beyond oil, or to keep circling the drain, waiting for a miracle.
The ceremonial speeches are no longer enough. The cracks are visible. The exits have begun.
And the future won’t wait. But if the right lessons are drawn now - if bold reforms, economic diversification, and a mindset shift are embraced - Brunei still has a chance to chart a resilient and forward-looking path. (MHO/06/2025)
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