Discovery of Oil & its Effects

Oil exploration in Brunei was began in 1899 when an oil seepage was discovered at Ayer Bekunchi near Kg. Kasat in Brunei District. However, NO OIL was found. This did not stopped the oil prospectors and companies who continued with oil expeditions elsewhere in Brunei. In 1911, the British Borneo Petroleum Syndicate Limited (BBPS) also carried out a geological survey searching for oil. Intensive exploration for oil was also carried out by other companies.

In late 1926, T.G. Cochrane, the general Manager of Sarawak Oil-field Limited(SOL), and F.F. Marriott, British Malayan Petroleum's(BMP) Field Superintendent of the Labi area, made a stop at Seria river while they were on their way to Kual Belait. Then they suggested a geological survey for the area. Later in April 1928, a geologist reported that 'hunreds of oil seepages were found in and around Kuala Seria'. Finally, a large oil-field was discovered in and around Seria in 1929.

This discovery led to the decision to drill the Seria Well Number One or S-1 on 12 July 1928. Later on 5 August 1929, they struck oil at 297m below ground level. S-1 would go on to produce 5, 320barrels of oil which led to the drilling of Seria Well Number Two on 19 August 1929.This oil discovery in 1929 meant a valuable source of income for Brunei. The revenue they got from the oil were used to pay off debts and improve living condition in Brunei.

Brunei then began to export its oil in 1931, where Brunei obtained a sum of $27,000(in Straits dollars)! With the end of the Great Depression, market conditions became more favourable and the sultanate's oil exports increased tremendously in value to $1,095,000 by 1932. However, in 1941, Brunei was to suffer the effects of the 2nd World War. Oil production decreased by half. Anticipating a Japanese advance into Southeast Asia, Shell's staff destroyed all oil production facilities in Brunei on 8 December 1941.