Tuesday, May 21, 2024
27 C
Brunei Town

Fuelling sustainable growth

Danial Norjidi

The energy sector continues to be a key engine for growth and socio-economic development for Brunei Darussalam.

Recent data from the Department of Economic Planning and Statistics, Ministry of Finance and Economy (MoFE) shows that the energy sector accounted for 58.8 per cent or BND11 billion of the country’s total gross domestic product (GDP) in 2021. Of this number, the oil and gas upstream sector contributed to 49.6 per cent, whereas the downstream sector for petroleum refining and chemical products and power sector contributed to another 8.4 per cent.

Minister at the Prime Minister’s Office Pehin Datu Lailaraja Major General (Rtd) Dato Paduka Seri Haji Awang Halbi bin Haji Mohd Yussof cited these numbers in a keynote address at the opening of the ‘Energy Security and Energy Transition: Today and Tomorrow’ exhibition launched on June 15 as part of the series of events for Energy Week in conjunction with the Brunei Mid-Year Conference and Exhibition (Brunei MYCE 2022) at the International Convention Centre (ICC), Berakas.

The minister shared a number of initiatives to boost and diversify the downstream sector, including the commencement of export of urea from Brunei’s first fertiliser plant, operated by Brunei Fertilizer Industries Sdn Bhd (BFI).

He noted that within the ASEAN region, a forecast from the International Energy Agency projects primary energy demand to increase by more than two thirds by 2040, and electricity demand in the region to grow 250 per cent by 2040.

In line with this, the Department of Energy is placing great emphasis on three main areas in meeting Brunei Darussalam’s energy security needs.

“The first is, managing our hydrocarbon resource effectively and sustainably to ensure our oil and gas sector remains stable and sustainable,” said the minister.

“Second, diversifying the country’s energy mix by promoting the use of renewable energy and encouraging the efficient and prudent use of energy,” he continued. “And third, improving energy services that are reliable and safe to the public as well as to all sectors of the country.”

With regards to energy transition, he emphasised that future growth in the energy sector must take into account issues on decarbonisation and the climate change agenda.

Hence, he said Brunei is pacing its energy sector growth with the energy transition agenda in mind towards a low-carbon future. “On this front, Brunei Darussalam has committed to a net-zero target by 2050 during the 2021 United Nations (UN) Climate Change Conference or COP26 held in November last year.

“In this context, natural gas, the cleanest form of fossil fuel, stands out as the most important transition fuel to support this move. Brunei Darussalam as a major LNG exporter will continue to develop its gas resources and promote natural gas in the global energy transition,” he added.

As was reported following the Energy Symposium held as part of the Energy Week, the oil and gas industry in Brunei Darussalam has seen major developments and contributed significantly to the country’s economy since the first commercial oil production in 1929.

The oil and gas industry employs more than 19,000 Bruneians while contributing 60 per cent to the local content of goods and services produced in the country.

With advancements in technology, investment and effort are made to increase recovery from the existing oil and gas fields, while guidelines and regulations are being enforced to achieve a sustainable oil and gas production.

Meanwhile, on November 4, 2021 Brunei Darussalam joined more than 70 other countries and organisations in supporting ‘The Global Coal to Clean Power Transition Statement’ at the 26th session of the UN COP26.

Through the statement, the Sultanate acknowledges coal-fired power generation as the single biggest cause of global temperature increase, and recognises the urgent need for an accelerated energy transition.

In addition, Brunei pledged commitment to working together to make clean power the most affordable and accessible option, with a vision to accelerate transition away from unabated coal-fired power generation.

As a signatory country, the Sultanate is committed to rapidly scaling up the deployment of clean power generation and energy efficiency measures; rapidly scaling up technologies and policies in this decade to achieve transition away for unabated coal-fired power generation as soon as possible; to cease the issuance of new permits of new unabated coal-fired power generation and cease new construction for unabated coal-fired power generation projects; and to strengthen domestic and international efforts to provide a robust framework to make just and inclusive transition way from unabated coal-fired power in a way that benefits the affected workers, sectors and communities.

Another notable development took place on November 18, 2021, when 13 companies signed on to the Brunei Energy Industry Integrity Pact (BEIIP) in a virtual ceremony.

The BEIIP is a pledge by companies to support a fair and honest oil and gas industry in the country. It consists of a set of 10 industry standards and expectations relating to transparency in business and good governance.

They include: prohibition of bribery and facilitation payments in business activities; a code of conduct in place and its principles disseminated to staff and contractors; consistent consequence management for violations of the code and principles;
visible training programme and communications in place; disclosure and avoidance of conflicts of interest; avoidance of gifts and hospitality which can lead to perceived influence or conflicts; governance and internal controls/policies in place; raising concerns, whistleblowing mechanisms, speaking up without fear of retaliation; investigations conducted impartially, fairly, and in timely fashion, and full collaboration with the Anti-Corruption Bureau (ACB); and refrain from doing business with those who demonstrate poor integrity and ethical practices.

Through the BEIIP, the oil and gas industry is conveying the message that any company lacking integrity and transparency will not have the opportunity to do business with any of the oil and gas operators in Brunei, said the statement.

As of November 2021, the BEIIP is made up of 88 members comprising both international and local companies.