Brunei Creates New State-Owned Oil Company

Brunei is set to play a bigger role in the global oil and gas scene under the newly established state-owned PetroleumBRUNEI. PetroleumBRUNEI chief executive officer Dato Paduka Haji Mohd Alimin bin Haji Abdul Wahab confirmed that the oil company will not only set up a trading arm but also soon invest in oil projects in South-east Asia.

'We plan to emulate the other national oil companies in this region, and in trading we will follow almost the same pattern as Malaysia's Petronas,' he said. He did not say when PetroleumBRUNEI's trading arm will be set up but did not rule out the possibility of this happening in 'a couple of years', according to reports.

Brunei's Oil and Gas Authority (Boga), the state's regulatory body, will be dissolved when PetroleumBRUNEI's new board of directors meets later this month, he said. PetroleumBRUNEI will assume Boga's responsibilities.

He said the company will start using production-sharing contracts (PSC) this year as a new model for oil and gas exploration and production in the sultanate. Production-sharing arrangements avoid tax and royalty payments required under concession contracts.