(Bandar Seri Begawan, 5th) Brunei Shell Petroleum (BSP) is quietly conducting employee layoffs. Over 200 employees have taken lucrative early retirement packages, sparking a wave of farewell posts on social media.
This is not a routine retirement wave. It is a strategic move aimed at cutting operational expenditure (OPEX), including salaries, asset maintenance, and operations management costs. With oil prices hovering between $60 to $65 per barrel, BSP faces the pressure of maintaining financial viability while managing aging oilfields and declining production.
In 2006, Brunei's crude oil production exceeded 221,000 barrels per day. By 2023, this figure had dropped to 93,000 barrels, and it is expected to further decrease to 73,000 barrels by the beginning of 2024. This sharp decline indicates that the drop in crude oil production is not due to natural depletion. It shows that the industry is in trouble, burdened with legacy expectations while struggling to find new pathways.
Insiders confirmed that this "golden handshake" scheme is part of a broader restructuring.
While BSP has yet to disclose the details of the plan publicly, multiple employees described it as a financially attractive exit package, reportedly including a lump sum payment, pension bonuses, and transition support.
This plan involves more than 200 employees, indicating that it is economically appealing and very timely for those considering early retirement.
Contractors are also being laid off, and some projects have been scaled back or quietly shelved.
A former engineer noted that ominous signs have emerged, and they are not just streamlining expenses but preparing for a leaner future.
Cost-cutting is not new to BSP, but the speed and scale this time indicate deeper concerns. Some high-cost projects have been postponed or scaled down.
Contractors report a reduction in budgets. Even strong-performing departments are restructuring.
An industry expert stated: “Currently, they are not just shedding weight but unloading burdens to avoid sinking.”
This is not just a corporate issue. More than 90% of Brunei’s revenue still relies on oil and gas.
Any changes in Brunei Shell Petroleum can send shockwaves through the entire nation. Public services, including healthcare, education, welfare, and civil servant salaries, depend on BSJV’s revenue. If this funding dries up, tough choices lie ahead.
And depletion is possible. Currently, oil prices average between $60 to $65 per barrel, below the mid-2024 peak of nearly $89.
The drop in oil prices has severely impacted national revenue and added extra pressure on Brunei Shell Petroleum’s profitability. Now, even a slight drop in oil prices could mean a massive impact on the national budget.
Privately, internal discussions within BSP have highlighted the urgency of cutting expenses to extend the life of Brunei’s aging oil fields.
Although not publicly disclosed, an internal analysis suggests that if current spending patterns continue, these oil fields may expire by 2029.
However, achieving significant cost savings (20% to 40%) could extend the life of the fields into the 2030s.
This underscores the motivations behind recent transformation efforts, including workforce restructuring and operational cuts.
The pressure on oil prices is partly due to global trade tensions. Tariffs from the administration of U.S. President Donald Trump affected many Asian economies.
These tariffs slowed economic growth, reduced industrial activity, and slashed global oil demand. As a result, oil prices fell, further squeezing oil-producing countries like Brunei. A drop of a few dollars per barrel equates to millions in lost revenue.
Meanwhile, foreign investors are withdrawing. In 2024, TotalEnergies sold its assets in Brunei to Malaysia’s Hibiscus Petroleum for $259 million, citing high costs and a lack of innovation.
Petronas is still trying to bring the Kelidang Cluster back online. The project is hailed as Brunei’s gas savior of the future but is costly, delayed till 2026, and faces compatibility issues with BLNG.
Local sentiments are changing. A Seria resident said that BSP is not what it used to be.
“They are cutting costs rather than moving forward.”
Many liken the current approach to flogging a dead horse—refusing to transform while clinging to outdated methods.
This analogy resonates. Brunei’s energy strategy cannot just revolve around cost-saving. It needs to be reshaped through modernization, diversification, and bold reforms.
BSJV's morale is plummeting. Employees say the goal is no longer about pursuing excellence but meeting restructuring targets.
Brunei’s technical talent is flocking to Qatar, Abu Dhabi, and Saudi Arabia. The brain drain is real—and accelerating.
But the deeper concern is not who leaves, but what remains.
Brunei has repeatedly pledged economic diversification, but this has yet to be truly realized. Few sectors outside oil can rival its income, stability, or national importance.
If serious investments aren’t made in renewable energy, digital industries, or other value-added sectors, Brunei risks being left with neither oil nor viable alternatives.
As one Reddit user noted: “We built castles on barrels. Now, it's leaking.”
The government now faces a choice: either adapt and prepare for a world without oil or continue to flounder in a channel, waiting for a miracle.
Ceremonial speeches are no longer enough. Cracks are showing. The exit has begun.
The future won’t wait. But if the right lessons are learned now—through bold reform, economic diversification, and a mindset shift—Brunei still has the chance to chart a resilient and forward-looking path.
This article was written by Malaiha Hasan, who began his journalism career in 1986 at Brunei’s leading English daily, The Borneo Bulletin, quickly making significant contributions in the media landscape of Brunei and the surrounding regions over the decades.
This is not a routine retirement wave. It is a strategic move aimed at cutting operational expenditure (OPEX), including salaries, asset maintenance, and operations management costs. With oil prices hovering between $60 to $65 per barrel, BSP faces the pressure of maintaining financial viability while managing aging oilfields and declining production.
In 2006, Brunei's crude oil production exceeded 221,000 barrels per day. By 2023, this figure had dropped to 93,000 barrels, and it is expected to further decrease to 73,000 barrels by the beginning of 2024. This sharp decline indicates that the drop in crude oil production is not due to natural depletion. It shows that the industry is in trouble, burdened with legacy expectations while struggling to find new pathways.
Insiders confirmed that this "golden handshake" scheme is part of a broader restructuring.
While BSP has yet to disclose the details of the plan publicly, multiple employees described it as a financially attractive exit package, reportedly including a lump sum payment, pension bonuses, and transition support.
This plan involves more than 200 employees, indicating that it is economically appealing and very timely for those considering early retirement.
Contractors are also being laid off, and some projects have been scaled back or quietly shelved.
A former engineer noted that ominous signs have emerged, and they are not just streamlining expenses but preparing for a leaner future.
Cost-cutting is not new to BSP, but the speed and scale this time indicate deeper concerns. Some high-cost projects have been postponed or scaled down.
Contractors report a reduction in budgets. Even strong-performing departments are restructuring.
An industry expert stated: “Currently, they are not just shedding weight but unloading burdens to avoid sinking.”
This is not just a corporate issue. More than 90% of Brunei’s revenue still relies on oil and gas.
Any changes in Brunei Shell Petroleum can send shockwaves through the entire nation. Public services, including healthcare, education, welfare, and civil servant salaries, depend on BSJV’s revenue. If this funding dries up, tough choices lie ahead.
And depletion is possible. Currently, oil prices average between $60 to $65 per barrel, below the mid-2024 peak of nearly $89.
The drop in oil prices has severely impacted national revenue and added extra pressure on Brunei Shell Petroleum’s profitability. Now, even a slight drop in oil prices could mean a massive impact on the national budget.
Privately, internal discussions within BSP have highlighted the urgency of cutting expenses to extend the life of Brunei’s aging oil fields.
Although not publicly disclosed, an internal analysis suggests that if current spending patterns continue, these oil fields may expire by 2029.
However, achieving significant cost savings (20% to 40%) could extend the life of the fields into the 2030s.
This underscores the motivations behind recent transformation efforts, including workforce restructuring and operational cuts.
The pressure on oil prices is partly due to global trade tensions. Tariffs from the administration of U.S. President Donald Trump affected many Asian economies.
These tariffs slowed economic growth, reduced industrial activity, and slashed global oil demand. As a result, oil prices fell, further squeezing oil-producing countries like Brunei. A drop of a few dollars per barrel equates to millions in lost revenue.
Meanwhile, foreign investors are withdrawing. In 2024, TotalEnergies sold its assets in Brunei to Malaysia’s Hibiscus Petroleum for $259 million, citing high costs and a lack of innovation.
Petronas is still trying to bring the Kelidang Cluster back online. The project is hailed as Brunei’s gas savior of the future but is costly, delayed till 2026, and faces compatibility issues with BLNG.
Local sentiments are changing. A Seria resident said that BSP is not what it used to be.
“They are cutting costs rather than moving forward.”
Many liken the current approach to flogging a dead horse—refusing to transform while clinging to outdated methods.
This analogy resonates. Brunei’s energy strategy cannot just revolve around cost-saving. It needs to be reshaped through modernization, diversification, and bold reforms.
BSJV's morale is plummeting. Employees say the goal is no longer about pursuing excellence but meeting restructuring targets.
Brunei’s technical talent is flocking to Qatar, Abu Dhabi, and Saudi Arabia. The brain drain is real—and accelerating.
But the deeper concern is not who leaves, but what remains.
Brunei has repeatedly pledged economic diversification, but this has yet to be truly realized. Few sectors outside oil can rival its income, stability, or national importance.
If serious investments aren’t made in renewable energy, digital industries, or other value-added sectors, Brunei risks being left with neither oil nor viable alternatives.
As one Reddit user noted: “We built castles on barrels. Now, it's leaking.”
The government now faces a choice: either adapt and prepare for a world without oil or continue to flounder in a channel, waiting for a miracle.
Ceremonial speeches are no longer enough. Cracks are showing. The exit has begun.
The future won’t wait. But if the right lessons are learned now—through bold reform, economic diversification, and a mindset shift—Brunei still has the chance to chart a resilient and forward-looking path.
This article was written by Malaiha Hasan, who began his journalism career in 1986 at Brunei’s leading English daily, The Borneo Bulletin, quickly making significant contributions in the media landscape of Brunei and the surrounding regions over the decades.