Brunei; Asia’s Newest Trade Hub



Brunei is a tiny nation independent in oil and gas revenues.  This year, marks 25th anniversary of ambassadorial relations between Brunei and China and Brunei’s leaders are very curious to become a part of China’s Oceanic Silk Road.

Though a drop in production, was noted recently, Brunei is the major exporter of total petroleum liquids in the Asian-Pacific region, with minimum domiciliary consumption.  Brunei, sends primary crude oil to Asian Oil Consumers, Indonesia, Japan, South Korea, China and Malaysia and net exports of Brunei were fairly good.  According to the China Daily, Brunei’s energy sector signifies 60% of its GDP and 90% of Government revenue and also retains Brunei among the countries that are facing unpredictability in oil prices.

The ancient trade routes with China are being revived, as Brunei intends to reduce its energy dependence and change into an export hub.  It benefits from its location, free trade agreements and political neutrality.  Japan is presently the largest trading partner, but Brunei’s trade with China is on an increasing pace and it has aimed to attain Japanese levels in the forthcoming years.  The China Daily reports that Brunei-Guangxi economic channel, established two years ago, has bagged over $500 million, in joint investments to develop strategic industries and this corridor positions Brunei as a gateway to China.  This passage could be of good use to other countries to enhance Brunei’s trade.


The Maritime Silk Road, is a Chinese strategic initiative to boost the investments and increase the collaboration across the historic Silk Road.  Brunei plans to increase its refinery capacity, as the Chinese Company Zhengyi group is constructing a new refinery with good production potential being targeted to come in operation in a couple of years.  This new facility will shift the dynamics of the country’s oil exports in support of consuming more crude oil and increased export of petroleum products.

Brunei was rich with oil and natural gas for numerous years,  produced  from two large fields South west Ampa and Champion in the offshore of Baram Delta, yet it’s a long standing venture with Royal Dutch Shell.  After reaching peak of production ten years ago, the production suddenly came down to half in 2014.  Brunei, produced most of its natural gas from South west Ampa, Champion and other oil production units.  In spite of increased demand in domestic gas in the past years, Brunei, still exports about three quarters of its production.  All-round effort for boosting Brunei’s natural gas to sustain its production and upkeep LNG exports for the next decade were also initiated.  Brunei continues to be a stable and long term exporter of LNG to Japan and Korea, from its Lumut LNG liquefaction plant.

Source: Trade Newswire


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