Speech by Mr S Iswaran, Minister, Prime Minister's Office and Second Minister for Home Affairs and Second Minister for Trade and Industry, at Opening Ceremony of OSEA 2012, 27 November 2012, 9:50 Am at Sands Expo and Convention Centre
Mr. Stephen Tan, Chief Executive, Singapore Exhibition Services,
Mr. Chow Yew Yuen, Chief Operating Officer, Keppel Offshore & Marine
Distinguished guests,
Ladies and gentlemen,
Introduction
A very good morning to all and a warm welcome to all our overseas guests. I am pleased to join you this morning for the opening of the 19th International Oil and Gas Industry Conference and Exhibition – OSEA, Asia’s most important oil and gas business event.
2. A biennial event held in Singapore since 1976, OSEA has grown significantly since its modest beginnings. Today, it is a leading oil and gas trade event in the Asia Pacific and the event continues to grow from strength to strength. Registering an overall growth of 14.6 per cent[1], this year’s event is also the biggest edition to date.
Resilience of Singapore’s marine and offshore industry
3. OSEA’s success mirrors the evolution and growth of Singapore’s marine and offshore industry. Over the years, we have built up a vibrant ecosystem of oil majors, drilling contractors, specialised marine equipment and offshore rig manufacturers as well as engineering service providers. Singapore’s expertise and capabilities in the design and construction of offshore rigs, platforms and support vessels have enabled us to become a global leader in this area. In fact, Singapore dominates 70 per cent of the global market share in the manufacture of jack-up rigs for offshore drilling, even though we do not have any hydrocarbon resources of our own.
4. Despite the global macro-economic uncertainties in 2011, Singapore’s marine and offshore sector continued to be resilient due to a steady demand for offshore equipment, fuelled by a strong flow of investments in the global energy sector. The total turnover of Singapore’s marine and offshore sector in 2011 was $13.3 billion, comparable to the $13.5 billion achieved in 2010.[2] Order books also continue to be strong with current net orders at a new high of more than $16 billion, with deliveries extending to 2015.
Tapping on Asia’s Growth
5. Looking ahead, the outlook for the marine and offshore sector continues to be positive, buoyed by continued growth in Asia. China and India remain key growth engines and will likely account for half the global incremental demand for energy from 2011 to 2020. Other fast-growing Asian economies like Indonesia, Malaysia, Thailand and Vietnam also fuel the demand for energy. Projections indicate that from 2011 to 2016, Asia’s energy demand will drive Asian companies to invest about US$29 billion on deep-sea exploration, drilling and production. This is more than double the US$12 billion spent from 2007 to 2011.[3]
6. With rising offshore drilling and production activities, the demand for offshore rigs, platforms and support vessels is set to increase. Singapore is well-placed to ride this offshore wave as our shipyards have built up a sound track record in providing cost-effective, safe and timely deliveries. We are also able to meet customer’s needs by offering a full spectrum of customised products and in-house proprietary designs for offshore rigs.
7. Beyond the offshore sector, the marine oil and gas sector is also experiencing strong growth. Several oil and gas players are making new investments in Singapore to serve the growing offshore market in the Asia Pacific. For example, FMC Technologies, an oil and gas equipment and service provider, has started operations at a $30 million plant in Singapore to meet the growing demand for subsea and surface wellhead equipment in the Asia Pacific. Weatherford International, one of the world’s largest oilfield services companies, has also launched a new multi-million dollar facility in Singapore which will provide a strategic base for the company’s operations within the Asia Pacific.
Singapore is committed to move up the value chain and increase productivity
8. Singapore will continue to invest to sharpen our competitive advantage to tap on the future growth opportunities in the global marine and offshore sector. We are investing in R&D to acquire new capabilities and move up the value chain. For instance, the National University of Singapore and the Nanyang Technological University (NTU) are collaborating with the Agency for Science, Technology and Research (A*STAR) to develop R&D capabilities in the oil and gas equipment sector. They are jointly designing high quality electronics and materials that can operate in the harsh offshore environment and deep waters. The Government has also invested $150 million in the Singapore Maritime Institute to fund R&D in areas such as naval architecture and marine engineering, maritime services as well as offshore and subsea systems.
9. Given Singapore’s resource constraints and intensifying competition globally, industry players here will have to find new ways to raise overall productivity. They are responding well to the challenge. For example, Keppel’s Offshore & Marine Technology Centre has started work on process technology measures aimed at improving productivity through process improvements and the optimisation of labour. Another example is Weatherford’s new facility in Loyang, which optimises land use by situating part of its open yard and warehouse on the rooftop.
Conclusion
10. In light of the growth potential of the marine and offshore industry, OSEA has become even more relevant than ever. Through OSEA, participants can cultivate new business opportunities and exchange views on sectoral trends and developments. I wish all of you a fruitful time at OSEA 2012.
Thank you.