Brunei Darussalam - Economy

Overview: Due to its extensive resources of oil and gas and small population, Brunei is among the world’s richer countries. The oil and gas sector accounts for around 50% of GDP and generates more than 90% of total export earnings and government revenues (2008). Brunei is vulnerable to fluctuations in world prices: the slump in oil prices was largely responsible for negative growth in the 1980s.

The economy and social infrastructure have been developed through a series of national development programmes. During the 1990s, the emphasis was on social services and public utilities. This continued into the 2000s, together with diversification of manufacturing, and encouragement of private investment, including foreign investment. Major projects include a gas pipeline, a power plant, and development at the port of Muara.

As the regional economic crisis of 1997–98 receded, the government announced plans to encourage fuller private-sector participation in public enterprises, to promote foreign investment – including, for the first time, allowing foreigners to own land in Brunei – and for the country to become a regional trade and services centre.

The country has benefited greatly from high global energy prices in the 2000s. With higher oil prices, the economy recovered in 1999 and grew steadily at around 3% – with little inflation – during the early 2000s, until growth slowed to 0.4% in 2004 and 0.5% in 2005, eventually picking up in 2006 with a rise in real GDP of 5.1%.

Trade: Natural gas and crude oil account for around 91% of exports (2004). Japan is a big customer for oil and liquefied natural gas, and is by far the most important export partner, taking 37% of exports in 2005, followed by ASEAN countries. Imports are mainly from ASEAN countries.

Oil and gas: The oil and gas sector contributes about 50% to GDP. Due to the official policy of diversification this has fallen from around 70% in the early 1980s. The country produced 187,000 barrels of oil a day in 2005.

Known hydrocarbon reserves were estimated in 2003 at 1.35bn barrels of oil and 391bn cubic metres of gas, enough to last 25 and 40 years respectively. New fields are being explored and development of gas production at the Egret Field began in May 2002. The refinery at Seria produces 10,000 barrels a day and the liquefied natural gas plant at Lamut is one of the world’s largest.