SPEECH BY DR KOH POH KOON, SENIOR MINISTER OF STATE FOR TRADE & INDUSTRY AND NATIONAL DEVELOPMENT AT THE OPENING CEREMONY OF BP SINGAPORE NEW OFFICE ON 21 MARCH 2018, 11.20 AM, AT MARINA ONE
Mr Alan Haywood, CEO of BP Supply & Trading
Dr Janet Kong, CEO Eastern Hemisphere, BP Supply & Trading
Your Excellency, Mr Scott Wightman,
Ladies and Gentlemen,
1. Good afternoon. It is my pleasure to join you today to celebrate the opening of BP Singapore’s new office here at Marina One. BP, one of the world’s leading integrated oil and gas companies, started its oil refining and marketing operations in Singapore in 1964. With more than 50 years of history here, this is yet another milestone for BP Singapore.
Evolution of Singapore’s oil trading sector
2. Many of you present will know that Singapore’s oil trading industry has come a long way since the 1960s when oil majors first invested in export-oriented refineries in Singapore to supply fuel to Asia’s fast growing economies. Today, Singapore is the largest oil trading hub and pricing centre for oil products in Asia, and we are home to 80% of the top global companies trading in petroleum and petroleum products. With 60% of global commodity flows taking place in Asian time zones, these companies have chosen to base their operations in Singapore to tap into the growing demand for energy in Asia, particularly China and India, as well as Indonesia and Vietnam.
3. At the same time, the world is seeing a more persified fuel mix, with the rapid growth of renewables and move towards a lower carbon future. As cleaner fuels feature more strongly in the energy mix, we expect to see continued growth in LNG trade flows and possibly even new trade flows in areas like carbon emissions and credits. 45 years after BP first laid its roots in Singapore, its first LNG trading desk outside of London was established here in 2009. The team has since grown to more than 30 people and conducts activities such as trading, origination, finance, operations, legal, analytics, and compliance. Today, there are more than 45 international firms with LNG trading desks in Singapore, and we continue to welcome firms like BP to base their LNG operations here.
Strengthening Singapore’s Energy Commodity Trading Ecosystem
4. While the energy commodity trading sector has developed well so far, Singapore must continue to find ways to remain competitive amidst these global trends. In line with today’s theme of modernisation and transformation, we must continue to adapt so as to enable a vibrant ecosystem for companies to thrive. Let me share two key ways in which we can achieve this:
5. First, we should continue to leverage on innovation and the use of technology to develop new solutions for the trading sector. Technological advancements such as data analytics and blockchain have the potential to significantly transform the way global trade is conducted. To illustrate, the commodities sector has always had to deal with multiple data points, from weather patterns to financial derivatives. With big data, analytics can facilitate real-time and more accurate decision making. Blockchain can also be applied to promote end-to-end tracking, as well as enhance transparency and efficiency in commodity trading.
6. To anchor such transformative technologies, Singapore will continue to provide an environment that supports innovation. For instance, companies can tap on the vibrant ecosystem of MNCs, local enterprises, start-ups and research institutes in Singapore to test-bed and roll-out innovative solutions that can benefit all parties involved, across the entire value chain. By tapping into the wide spectrum of the world’s top commodity trading firms present in Singapore, solution providers can connect quickly with perse counterparties to understand and respond to customer demands and concerns, thereby enabling the traders to gauge the robustness, and effectiveness of any new trade services.
7. Second, Singapore will continue to develop and build a pipeline for talent for the trading sector. As this sector continues to evolve, companies will require talent with global market exposure, connections and experience. Specialised talent with digital skillsets such as digital marketing, global supply chain and data analytics will also be in demand as companies adopt new business models. Talent development is an area that Singapore invests significantly in, and we look to strong industry partnership to ensure that these programmes remain relevant to industry needs. For example, Nanyang Technological University’s International Trading Programme (ITP), which was co-developed by IE Singapore with inputs from industry practitioners, is geared towards getting students acquainted with subject matters such as trade finance, supply chain management, risk management and derivatives trading. Today, I am extremely delighted to witness the MOU signing between BP Singapore and NTU, in which BP’s industry expertise will be applied in planning NTU’s academic curriculum, and where internships to NTU’s undergraduates will be made available. This will contribute to the development of a strong talent pool to better enable trading companies to capture future growth opportunities.
8. I am also heartened to hear that BP Singapore has stepped forward to participate in the Professional Conversion Programme (PCP), an IE Singapore initiative that has helped mid-career professionals pursue a career in international trading. To date, the programme has successfully matched close to 90 professionals with trading companies. Such initiatives will encourage more professionals to join the trading sector.
9. In closing, I would like to congratulate BP once again on the opening of this new office, and thank you for your continued commitment and contributions to the Singapore energy landscape. I am confident that the future of the commodity trading sector remains bright with joint efforts from both the industry and Government. We look forward to further deepening our partnership with BP, and I wish you every success in your ventures. Thank you.