Brunei Darussalam's long-term prosperity depends on its ability to leverage existing strengths and convert into future opportunities. The country benefits, amongst others, from political stability, strong oil and gas infrastructure, a strategic Southeast Asian location, and a young, educated population.
Brunei's shift from a resource-reliant economy to one that is more diversified and sustainable is underpinned by these strategic advantages. The energy sector remains central, with continued efforts to sustainably maintain upstream production, grow downstream industries like petrochemicals, and ensure energy security driving this transformation.
Of note, the growth of high-value downstream industries — such as petrochemicals — is opening up new revenue streams and encouraging the development of industrial capabilities beyond traditional crude and liquefied natural gas (LNG) exports.
By building on its legacy strengths, Brunei is creating new revenue streams and industrial capabilities, aligning with global trends toward value-added production and cleaner energy. This strategic approach positions the country for regional competitiveness and long-term resilience.
OIL AND GAS SECTOR
Oil and gas will remain a critical pillar of Brunei's economy in the near to medium term, but more significantly, the sector is being positioned as a strategic enabler of economic transformation.
Rather than viewing hydrocarbons as a constraint amid global energy transitions and market volatility, Brunei regards them as foundational assets to accelerate diversification and long-term sustainability.
The country is actively working to maximise the value of its hydrocarbon resources—not only through exports but by expanding into higher-value downstream industries.
These efforts are generating new economic opportunities, attracting foreign investment and laying the groundwork for broader industrial development.
Brunei Methanol Company (BMC), the nation's first major downstream player, began operations in 2010, integrating Brunei into the regional and global methanol supply chain.
Since then, the sector has grown with the launch of the Pulau Muara Besar Refinery and Petrochemical Plant (Phase I) in 2019 by Hengyi Industries, and Brunei Fertilizer Industries (BFI) in 2022.
The upcoming Phase II expansion of PMB is expected to significantly boost production capacity and position Brunei as a regional hub for high-value petrochemical products, aligning with national economic priorities outlined in the Economic Blueprint.
These downstream developments are being pursued in tandem with Brunei's broader push for decarbonisation.
Guided by principles of energy efficiency, technological innovation, and a gradual shift toward renewables, the strategy ensures that hydrocarbons continue to underpin economic growth while catalysing the development of low-carbon and future-facing industries.
ENERGY TRANSFORMATION
As an oil and gas producer, Brunei Darussalam is prioritising the transition to a lower-carbon energy system to safeguard both national energy security and the environment.
The initiatives include the national target of increasing the total share of renewable energy to at least 30% of total power installed capacity by 2035. The transition to cleaner energy is being pursued inclusively and at a measured pace, ensuring all sectors and stakeholders progress collectively.
Substantial investments are underway to modernise the power grid and improve its ability to integrate renewables. This strategy strikes a balance between managing emissions from existing energy infrastructure while integrating new, cleaner technologies and incorporating new, cleaner technologies—unlocking major economic opportunities in low-carbon solutions.
The Brunei Darussalam National Climate Change Policy (BNCCP), which sets out decarbonisation strategies aimed at transforming the power sector through increased adoption of renewable energy technologies. At the international front, Brunei Darussalam has set ambitious national targets consistent with its Nationally Determined Contributions (NDCs). Currently, renewable energy accounts for just under 1% of the power generation mix, with installed capacity exceeding 19 megawatts.
A strong partnership between the Government of His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam and major oil and gas players is pivotal, particularly in driving decarbonisation and scaling renewable deployment. One of the flagship projects is the 30MW Solar Power Plant—the country's largest government-led solar project that is set to break ground in the third quarter of 2025,
Additionally, the Department of Energy introduced the Net-Metering Programme in 2021, encouraging residential and commercial uptake of small- to medium-scale solar photovoltaic systems. Brunei's energy sector, historically anchored by upstream oil and gas and now expanding downstream, remains central to economic diversification and resilience.
The nation's reputation as a reliable LNG supplier, combined with its ambitious low-carbon initiatives, reinforces its role as a regional enabler of energy transition.
These efforts are critical not only to achieving the aspirations of Wawasan 2035 but also to maintaining Brunei's competitiveness amid a rapidly evolving global energy landscape.
Parallel to this, foreign direct investment is fostering growth in non-oil sectors, further underpinning economic diversification.
Ultimately, Brunei Darussalam's economic future will be shaped by the strategic transformation of its energy sector—maintaining upstream activities, growing high-value downstream industries, and advancing low-carbon solutions to sustain the country's energy security, sustainability and promote resilient growth.
