Brunei Offshore Blocks Up for Bid

Two consortia of international oil companies have submitted bids for oil-rich Brunei's two offshore blocks, the government said. The partners of one of the consortia are Shell, Mitsubishi Corp and Conoco, while the other consists of TotalFinalElf, BHP Billiton and Amerada Hess.

The government's Petroleum Unit is currently evaluating the bids for the two deep water blocks located within Brunei Exclusive Economic Zone. The closing date for the submission of the bids was November 1. The bids also marked another milestone in the history of Brunei's petroleum industry where an area of 10,000 square kilometers was opened for international players to venture into deep-sea oil and gas exploration and production.

Brunei earlier this month set up a national oil company to consolidate and mobilize the tiny sultanate's petroleum industry. Officials said the national oil company would play a more active role in petroleum exploration and development, and accelerate development of a domestic industrial base in Brunei.

The move was seen as a blow to the monopoly of oil giant Royal Dutch/Shell group, which has long dominated Brunei's oil sector and the economy. Until recently, Shell was the only firm involved in Brunei's upstream and downstream activities. France's TotalFinalElf recently started producing oil and gas at an offshore block. Brunei, which produces about 163,000 barrels a day of oil, is southeast Asia's fourth largest producer after Indonesia, Vietnam and Malaysia. It is also a big producer of liquefied natural gas.