Brunei, Before the Oil Years

[My article below was published on Brunei Times on 16th May 2011. It looked at the situation in Brunei in 1930, the year after the discovery of oil but that oil has not yet gone info full production. It was also the Great Depression for the world. Hope you enjoy the article.]

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Brunei, Before the Oil Years
by Rozan Yunos

Many in Brunei knew 1929 was one of the most crucial of all years in recent Brunei history. That year was the year that oil was found in commercial quantity in Brunei. It took more than a quarter of a century for that oil to be discovered.

Oil has been more or less expected to be found in the North West Borneo area. By the mid 19th century, seepages have been reported in a number of places and oil prospectors have come in droves flooding in to Borneo and into Brunei all hoping to be the lucky person to find that oil. Oil prospectors tried drilling in a number of places.

In Brunei, an oil seepage was reported in the late 19th century. It was at Ayer Bekunci near Kampung Kasat. A well was drilled for the first time in Brunei in 1899. The drilling went down as deep as 850 feet but unfortunately no oil was discovered. After that attempt, interest in finding oil in Brunei waned. It was the discovery of oil in Miri in 1910 that led the oil companies to renew their search which eventually led to that discovery in Seria in 1929.

It took a couple of years before oil became the main export of Brunei. Today’s article will look into the year of 1930, the year after the oil was discovered but has not yet contributed much to the Brunei economy. This was probably the last year that Brunei had to worry about its finances. Its fortune was about to change but changes in administration and management were starting to be seen.

The Annual Report for the State of Brunei 1930 was prepared by the British Resident who was then P.A.B. McKerron. His name still lived on in Kuala Belait with one of the streets there named after him. His Highness Sultan Ahmed Tajudin Akhazul Khairi Waddin ibni Al-Marhum Sultan Mohamed Jamalul Alam was then the Sultan. He was 17 at that time and Duli Pengiran Bendahara and Duli Pengiran Pemancha were appointed as Joint Regents.

Economically, things were not good for Brunei. The prices of rubber and other raw materials forming the bulk of exports from Brunei continued to fall. It was the time of the Great Depression which originated with the fall in stock prices in USA on 4 September the previous year. International trade plunged by more than 50%; and unemployment in USA rose to 25% with most other countries experiencing more than a third of their labour forces unemployed.

The Brunei Annual Report indicated that local Chinese firms could not pay for their imports. The locals had to sell their silver dollars which they had accumulated the years when rubber prices were good. However in spite of all these, Brunei’s trade values increased from $2.7 million in 1929 to $3.3 million in 1930. This was due to the rapid development now taking place in the Belait District. The effect of the discovery of that oil in 1929 has begun to show up in Brunei.

The Report also indicated that there were positive outcomes with regard to Brunei when Sir Cecil Clementi, the High Commissioner accompanied by Lady Clementi paid their first visit to Brunei. During his stay, a conference took place between the High Commissioner and the Tuan Muda of Sarawak where several important matters mutually concerning the two states were settled. The Report did not disclose what those important matters were.

Approval was also given to create an Assistant Resident post to be stationed in Kuala Belait. Mr. T.F. Carey was appointed to the new post. He was expected to better supervise the important development then taking place in Kuala Belait.

There were financial deficits in 1930. The government only managed to collect $333,069 in revenue but spent more than $379,604. This deficit would have been larger had the expenses for the widening of the wharf been included. That was funded out of an appropriation from the liquid cash reserves. The 1930 revenue was much lower compared to the previous 4 years. Brunei owed $401,000 in public debt in 1930, the majority of which is debt to the Straits Settlement Government.

Brunei was still active in agriculture. With the rubber prices down, farmers focused on sago which had been badly neglected since rubber planting began. In 1930, more than 6,000 pikuls were produced compared to 3,000 pikuls the previous year. But by the end of the year, the sago prices too had fallen so low that it hardly paid to export it.

Rice was grown in a much larger area, 7,500 acres compared to 5,200 acres the year before. However production of rice using the dry method was severely affected by a severe drought but increased yields using the wet method compensated for the loss. The Brunei farmers were now convinced of using the wet method over the previous traditional dry cultivation.

Brunei’s wharf at the Brunei River was reinforced and now allowed steamers up to 12 feet long to berth. The Tutong Road was maintained in good order but in general was still an earth road. The roads in Kuala Belait and Seria were taken over by the British Malayan Petroleum Company. A pontoon car-ferry was established at Kuala Tutong to allow traffic between Brunei and Kuala Belait.

In the oil industry, several excellent producing wells were completed in 1930. The year also saw a very thorough investigation of the field. A grid of access roads had been commenced and a steel pile bridge constructed over the Seria River to ensure good communications with the company’s headquarters in Kuala Belait.

Many development followed suit. There were many new store godowns, offices and quarters for the employees being constructed. A pipe line water supply was also being looked at.

Unfortunately the Great Depression of 1930s also had an effect on the overall development of the oil industry. The overall world oil was in excess production because of the poor global demand. If it was not for this, Brunei’s oil would have been exported by the following year. However despite the pessimisms of the oil industry, development continued albeit slower in the oil fields of Seria.

Despite the mixed signs, development in 1930 was the beginning of a period of good years for Brunei.

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