By CT Hj Mahmod & M K Anwar Bandar Seri Begawan

Minister of Energy at the Prime Minister's Office, Pehin Dato Awg Hj Yahya yesterday morning officially launched onshore Blocks `L' and `M' for oil exploration and production. The launching of the 2,253 sq. km Block `L' that lies onshore in the Brunei Muara district, part of Tutong and Temburong districts, and the 3,011 sq. km Block `M' at the southern part of Belait district, indicated the start of many other achievements to come in energy development in the oil and gas industry.

In his speech, Pehin Dato Awg Hj Yahya noted that the event is an important milestone in energy development in general and in the development of oil and gas in Brunei in particular.

"The event this morning marks another indication of the continuous effort of the Government of His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam to provide the necessary element to fuel the economic development of the nation," he said.

The launching of onshore Blocks `L' and `M', he added, is a continuation of series of programme to tender out areas for oil exploration and production that began in 2001 with the tendering out of the deep water Blocks `J' and `K'.

"It also highlights an important Government policy to create Brunei Darussalam as an investor-friendly destination," he added.

Also giving his remarks during the launching ceremony was PetroleumBRUNEI's Acting Chief Executive Officer, Awg Mohammad Reduan bin Hj Mohd Yusof. Other guests included senior government officials, foreign dignitaries and representatives of oil companies. Awg Mohammad Reduan said the increasing oil price is a further boost to the industry's long-term prospects for returns on investment. It is this concern on the need for reasonable returns of investment, he said that "we must be mindful of, in our efforts in attracting foreign investors in this industry, or any other industry for that matter." "We have to strike a proper balance between expectations from the commercial angle as well as from the non-commercial ones," he underscored, adding that PetroleumBRUNEI is confident that such balance, or a 'win-win situation' can be achieved with the terms and conditions that they have designed for the recentlylaunched onshore blocks. The launching carries with it the promise of greater opportunities for everyone, he said, adding that the two onshore blocks bring with them the prospect of increasing the nation's oil and gas reserves as well as the potential for greater employment opportunities.

A huge portion of both Blocks L and M areas remains unexplored. Historically in Block L, a few exploration wells had been drilled in the area where hydrocarbon indications were evident in the underlying reservoir.

A number of exploration wells were drilled with the discovery of Jerudong Oil field in Block L where more than 600,000 barrels of oil were produced from the field between 1955 and 1962. Block M has been explored since the beginning of the last century with the first successful well, Belait-2, producing a total of 33,000 barrels of oil between 1924 and 1931. Many of these wells - Belait 11 - 14 and Belait 15 -18 were drilled in Talingan area and encountered good oil and gas reservoir. -- Courtesy of Borneo Bulletin