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BANDAR SERI BEGAWAN – Brunei’s crude oil manufacturing plunged to a report low within the third quarter of 2021 because the second COVID wave took a toll on the financial system, which shrank for the fourth consecutive quarter.
The Brunei financial system sunk deeper into recession after posting a damaging development of two.2 % in Q3 2021, in accordance with the Division of Financial Planning and Statistics’ newest GDP report that was launched final weekend.
With declining income within the first three quarters of 2021, the sultanate was anticipated to finish the yr on a low word.
The final time Brunei suffered an extended financial downturn was in 2016 when oil costs crashed to an 11-year low of $34.62 a barrel.
Information confirmed the oil and fuel sector contracting 5.3 % in Q3 2021, owing to the bottom quarterly oil output of 97,100 barrels a day. The earlier report was set in Q2 2018 at 97,600 barrels a day.
The hydrocarbon sector had skilled manufacturing disruptions following lots of of COVID-19 instances detected on the Champion 7 offshore oil area in August final yr.
“Restricted onsite workforce on account of COVID-19 diminished the flexibility to get better from unscheduled deferment and delayed effectively, reservoir and facility administration actions,” DEPS stated in a press assertion.
Nevertheless, the power sector has been in damaging territory since Q1 2020 — earlier than the pandemic hit Brunei.
The diminished oil manufacturing got here at a time when oil costs continued to rise on account of elevated demand.
DEPS stated the common oil value jumped 68 per cent to US$75.18 a barrel in Q3 2021.
Brunei’s liquefied pure fuel output additionally scaled down from 834,500 million British thermal items per day (MMBtu/d) in Q3 2020 to 750,900 MMBtu/d in the identical interval final yr.
“LNG manufacturing declined on account of restricted fuel provide and upkeep actions at one of many LNG plant amenities,” DEPS stated.
Including to the woes of the power sector, pure fuel manufacturing decreased to twenty-eight.5 million cubic metres a day in Q3 2021, in comparison with 30.7 million cubic metres a day in Q3 2020.
Extra losses in downstream sector
The poor financial efficiency in Q3 2021 was additional exacerbated by income losses within the downstream oil and fuel sector, which fell one % year-on-year.
Since petrochemical firm Hengyi Industries started operations within the last quarter of 2019, Brunei has been counting on the downstream sector to offset losses within the power sector over the previous two years.
Downstream actions have been the most important driver of Brunei’s financial development in 2020, with the manufacturing of petrochemicals hovering 323.9 %.
Nevertheless, the downstream sector’s optimistic momentum ended within the second quarter of 2021, although no motive was given for the dip in earnings.
Companies business maintains modest restoration
Regardless of companies ordered to close or work at home amid the second COVID wave, the providers sector defied gloomy expectations to submit a modest 1.1 % development.
The providers business expanded for the third straight quarter in 2021 after reporting dwindling income in all 4 quarters of 2020.
The air transport business made the most important positive aspects in Q3 2021, leaping 84.5 % to take care of its optimistic development from the earlier quarter.
Different industries in optimistic territory have been finance (9%), communication (6.1%), and different transport providers (4%).
Conversely, seven sub-sectors within the providers sector have been badly hit by COVID restrictions, together with wholesale and retail commerce, water transport and eating places.
The providers sector contributed to 36.8 % of Brunei’s GDP in Q3.
One other shiny spot in Brunei’s struggling financial system was the agriculture, fishery and forestry sector, climbing 27.9 % within the third quarter.
DEPS attributed the expansion to the rise in manufacturing of greens and fruits (48.1%), fishery (34%), livestock and poultry (19.4%), in addition to forestry (12%).
The agriculture, fishery and forestry sector solely accounted for 1.4 % of the Q3 GDP.
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