Oil and natural gas mining is the backbone of Brunei's economy. In 1998 the oil and gas sector contributed an estimated 34 percent to GDP and dominated exports. In 1998 crude oil and partly refined petroleum accounted for an estimated 39 percent of total exports and natural gas for 49 percent. Brunei is the third largest oil producer in Southeast Asia and the fourteenth largest in the world; it ranks fourth in production of natural gas. Oil and gas mining is a capital-intensive industry and employs only a small percentage of the total labor force (5.2 percent in 1995). At the beginning of 1993 reserves were estimated at 1.4 billion barrels of oil and 320 billion cubic meters of gas. The government has pursued a national depletion policy since 1988 aimed at preserving resources and continuing exploration of new fields.
Brunei Shell Petroleum (BSP) is the biggest oil mining company. It has 7 offshore and 2 onshore oil fields in Brunei. The Brunei government is an equal shareholder with the Royal Dutch Shell Group in the company. Another important oil-exploration company is Jasra-Elf, a joint venture that has been actively exploring for hydro-carbons offshore and has made some discoveries.
Brunei's annual sales of liquefied natural gas (LNG) sales are currently nearly 6 million metric tons. LNG is as important a revenue earner as oil exports, and the bulk of it is purchased by 3 Japanese utility companies: Tokyo Electric, Tokyo Gas, and Osaka Gas. About 10 percent of LNG is used for domestic consumption.
Following the regional economic crisis in 1997, combined with concerns about falling oil prices throughout 1998, the Brunei government realized that the oil and gas industry can no longer limit itself just to exploration, drilling, and export. It is now aiming at developing a hydrocarbon products industry in Brunei.