OBG talks to Pehin Dato Yasmin Umar, Minister of Energy

Interview: Pehin Dato Yasmin Umar

What is the outlook for liquid natural gas (LNG)?

PEHIN DATO YASMIN UMAR: The global LNG market is opening up, with increased investment in LNG infrastructure, abundant gas resources and LNG’s reputation for being a clean source of energy. This is true for countries throughout Asia, including ASEAN member states. The growth in LNG can only mean good things for an LNG exporter like Brunei Darussalam, as this will result in many more opportunities for export. The Sultanate, through Brunei LNG, is currently in negotiations with interested parties that would ensure Brunei Darussalam’s longstanding and continuous LNG export trade in the region.

How are domestic measures supporting the development of an energy conservation policy?

PEHIN DATO YASMIN: We are committed to ensuring that energy efficiency and conservation (EEC) is practised at all levels of society. We have implemented a new progressive electricity tariff for residential homes, which came into force in January 2012. This change in tariff has already resulted in an overall reduction of 6.2% in energy consumption. We have also improved the efficiency of existing power generation, with the operation of our efficient combined-cycle power station in Bukit Panggal and co-generation plant in Lumut. There are several other EEC measures in the pipeline, such as the introduction of an appliance standards and labelling scheme, an energy management initiative, fuel economy rules, efficient building regulations and tax incentives for energy efficient equipment. We expect that these measures will contribute to Brunei Darussalam’s commitment to reduce energy intensity by 45% in the year 2035, compared to 2005 levels.

In which segments of the domestic energy sector would you like to see more foreign participation?

PEHIN DATO YASMIN: We have always been open to foreign investment in Brunei Darussalam and we aim to keep it that way in the years to come. We welcome foreign oil and gas service companies that want to set up base here and we provide technical services and expertise to oil and gas operators, not only in Brunei Darussalam, but elsewhere in the region. As part of the nation’s long-term policy of strengthening the oil and gas value chain, we are interested in foreign investment in downstream activities, as we are of the opinion that this sector has a lot of potential for development.

We are looking for firms that can add value to the oil and gas produced domestically, and offer a competitive pricing structure for feedstock such as gas.

Several project proposals are currently being assessed.

We are firm in our efforts to promote domestic business development, so foreign companies that invest in the oil and gas industry in the Sultanate shall abide by local business directives, which cover recruitment and the sourcing of local content for their activities.

What is being done to develop scope for local businesses to be active in the oil and gas field?

PEHIN DATO YASMIN: Over the past couple of years we have improved local business development (LBD) by focusing on local employment, local business participation and local content in the oil and gas industry.

We have introduced specific business directives that require firms to abide by our LBD preferences and report progress in this area quarterly. We are also taking action to prevent anti-competitive behaviour, collusion and bid-rigging in the oil and gas services sector. So, the state is taking a strong stand with regards to unethical behaviour. We have steadily encouraged locals – whether they be graduates, seasoned professionals or even schoolchildren – to work in the industry through job fairs and career roadshows. With the formulation of a proposed energy industry competency framework, we are slowly but surely laying the foundation for skilled and non-skilled workers to be trained for jobs in the industry. The government set a target of recruiting 1000 locals to the industry in 2012. That target was surpassed in the first 10 months of the year, and the 2013 target has been set even higher.