2.000
%
Neutral
15
mm boe
41
%
Brunei is a mature province that has lagged its peers in attracting investment. The government continues to reform terms to attract independent E&Ps, but access for smaller operators appears to have stalled, with Brunei Shell and the majors dominating. Outlook maintained because reforms have yet to translate into wider access. Outlook: Neutral. Risk premia unchanged at 2%.
October 7, 2026
Asia - South East
mm bbl
bcf
Southeastern Asia, along the northern coast of the island of Borneo, bordering the South China Sea and Malaysia.
PSC/PSA
Production Sharing Contract (PSC)-based fiscal regime. The Government has the option to back in for a 15% equity stake at the time of first production. Cost recovery is limited to 80% of gross oil and gas revenues in deepwater PSCs in any year, while profit oil splits are biddable on a tiered system based on oil production rates. Corporate income tax and a range of bonuses, rentals and fees are payable. All production in Brunei is currently governed by older concession terms, but PSC is the preferred system for recent and future licensing. Petroleum Brunei is eager to play a more active role in Upstream projects and may seek to obtain a larger equity share in future developments; the Brunei/Malaysia disputed acreage will likely be licensed using a variant of the Deepwater PSC. Profit splits between the two countries are unknown at present.
Brunei is a stable absolute monarchy under Sultan Hassanal Bolkiah. Oil & gas account for roughly half of GDP and the vast majority of exports. US and UK guidance cite low security risk, but note a small market, the dominant role of the state, Sharia penal code concerns and slow bureaucracy. The EIA notes mature, gradually declining production operated mainly through Brunei Shell Petroleum, with Brunei LNG as a long-standing exporter. The Chinese-backed Hengyi refinery and petrochemical complex at Pulau Muara Besar is the flagship downstream diversification project.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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