History of Oil & Gas


Introduction

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Brunei Darussalam has been known for its vast reserves of petroleum and gas, which has fuelled the nation’s economy for the past 85 years and more. 

Exploration started in 1899 with the first recorded well drilled close to Brunei town, now known as Bandar Seri Begawan. Enthusiasm was high and six companies were involved in the oil search including Royal Dutch Shell, which started operations in 1913 after discovering the Miri field in Sarawak, Malaysia.

By 1918, all other companies had pulled out except Royal Dutch Shell, which continued to search and found some accumulation of oil and gas in Labi, Belait in 1924. The find was too small to be commercialised. 

In 1925, the search shifted to the Seria, Belait coastal strip in the west of the state and it was in 1929 when first commercial find was made at Seria, Belait in1929 by the British Malayan Petroleum Company, owned by Royal Dutch Shell, which was the forerunner to the present Brunei Shell Petroleum Company Sdn Bhd (BSP). 

For a long time, this onshore Seria oil field was Brunei Darussalam’s only producing field despite some 48 exploration wells being drilled between 1914 and 1960. It was developed further in 1940 and production had risen to 17,000 barrels per day. Despite extensive damage to the field caused in World War II, post war production peaked to 15,000 barrels per day.


The breakthrough came in the 1960’s when technological advances made offshore exploration feasible and the South West Ampa field was discovered in 1963, thirteen kilometres off Kuala Belait.

It was the discovery of the South West Ampa gas field, which sparked plans for the Brunei LNG plant project. The Brunei LNG plant began its operation in 1972 as one of the world’s first large scale liquefied natural gas (LNG) plant on the coast of Brunei Darussalam.

Setting new standards in engineering technology, Brunei LNG proved that large quantities of gas could be liquefied safely and shipped over long distances becoming a model for similar ventures throughout the world. 

In 1969, a major discovery was found in the Fairley field which is close to Ampa and in 1970, Champion was discovered about 70 kilometres north-east of Seria. Two more oilfields were discovered namely the Magpie which was found in 1975 and Rasau in 1979. These new oilfields increased the production to 250,000 barrels per day at that time. 

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A milestone was achieved in 1991 when the Seria field produced its billionth barrel and a monument was built near the original site of Well No. 1 to mark the achievement. The Billionth Barrel Monument was officially opened by His Majesty Sultan Haji Hassanal Bolkiah Mu'izzaddin Waddaulah, Sultan dan Yang Di-Pertuan Negara Brunei Darussalam on 18 July 1991.

The signing of two new Petroleum Mining Agreements (PMAs) on 17 December 2003, between the Government of Brunei Darussalam and BSP, marked a significant milestone for Brunei Darussalam, BSP and the Shell Group.

These agreements called the Onshore Petroleum Mining Agreement and the Consolidated First and Second Offshore Petroleum Mining Agreement, respectively, give effect to an extension of BSP’s rights for a period of 19 years, with a potential further extension thereafter for up to 15 years. BSP’s rights under the Second Offshore concession agreement have also been extended for a period of 15 years, with a similar potential further extension.


The Offshore and Onshore Fields

The most prolific offshore field is Champion, which is in 30 metres of water, about 70 kilometres northeast of Seria. It holds 40 percent of the country’s known reserves and produces around 100,000 barrels a day. The field already has more than 260 wells drilled from 40 platforms. A central field complex, Champion-7, has living quarters for about 160 personnel, gaslift and compression facilities and water injection facilities.

The oldest field offshore is South West Ampa, 13 kilometres off Kuala Belait. Its reservoirs hold more than half of Brunei Darussalam’s total gas reserves and gas production and accounts for 60 per cent of the company’s total production. Gas from its 56 gas wells is piped 39 kilometres to the Brunei LNG plant in Lumut. South West Ampa also has substantial oil reserves with 164 oil producing wells.

Close to Ampa are the Fairley and Gannet fields which produce both oil and gas. Fairley has 29 oil and 22 gas wells.

The other major offshore filed is Magpie, 60 kilometres north-east of Seria, which has been producing since 1977. Production is now maintained at some 6,000 barrels a day from its 32 wells, drilled from three platforms.

BSP also has a share of production from the Fairley-Baram field, which straddles the border with Sarawak.

In January 1992, BSP’s seventh field came on stream at Iron Duke, 13 kilometres south-west of Champion. It was the first new field to start production since Gannet in 1988. Production is from three wells hooked up to Champion via the company’s multiphase pipeline.

Onshore, the Seria field was Brunei Darussalam’s major producer until the 1970s. Today it still contributes some 28,000 barrels per day from a coastal corridor 13 kilometres long by 2.5 kilometres wide and in 1991 produced its billionth barrel, commemorated by a monument near the site of the first well. The other onshore field is Rasau, west of the Belait River.