His Excellency Jamal Al Suwaidi, UAE Ambassador to Singapore and Patron of the UAE Singapore Business Council,
His Excellency Sultan Al Hendaasi, Director-General of the Fujairah Chamber of Commerce and Industry,
Dr Brian Shegar, President of the UAE Singapore Business Council,
Mr Lee Yi Shyan, Patron of the UAE Singapore Business Council and Chairman of Business China,
Distinguished Speakers, Guests, Ladies and Gentlemen,
1. A very good afternoon from Singapore and thank you for the invitation to speak at this webinar. This event is an opportune platform for us to convene and share key insights on the oil, petrochemical and logistics sectors as we move towards a new normal.
2. I would like to thank Dr Brian Shegar, the UAE Singapore Business Council and the Embassy of the UAE for putting this Webinar together. Amidst the challenging backdrop posed by COVID-19, it is even more critical now, than ever, for business councils to continue creating opportunities for the business community to meet at forums like these.
3. As businesses adapt to the new normal, business councils have likewise adapted to the changes brought on by the pandemic, and continued to strengthen the networks between business communities. This continues to be vital during the extended period of limited business travel. We need to help businesses adjust and chart new pathways for them to emerge stronger.
Economic Impact of COVID-19
4. 2020 was a year of crisis and profound changes. The global economy contracted by 3.3%. The oil, petrochemical and logistics industries in particular, bore the brunt of this contraction as tourism and air travel were severely affected, resulting in a sharp drop in global demand for oil. According to the International Energy Agency (IEA), global demand for oil in 2020 fell by an estimated 8.6%, the largest decline in history.
5. However, we are expecting to see a rebound in 2021, with the International Monetary Fund (IMF) projecting the global economy to grow by 6% in 2021 and 4.4% in 2022. The IEA also estimates that global oil demand may return to pre-pandemic levels by the end of 2022. This gradual improvement in oil demand has led to a recovery in oil prices from a low of US$20 per barrel in March 2020 to above US$70 per barrel in July 2021.
6. Nevertheless, we must be prepared that the sector and the overall economy will take time to recover. With the emergence of new and more infectious COVID-19 strains, Covid-19 is unlikely to go away and subsequent waves of infections could be a normal occurrence in the coming years.
Singapore-UAE Collaboration amidst global uncertainties
7. Amidst these uncertainties, it is paramount that like-minded countries like Singapore and the UAE continue to strengthen and advance our existing collaborations.
8. Singapore and the UAE have built a strong trading relationship over the years, particularly in the oil and petrochemical sector. Our trade in oil, petroleum and derivatives typically account for more than 80% of our 2 countries’ total annual trade. The steady partnerships forged between Singapore and UAE companies in the sector have played a key role in sustaining our trade flows. We have built a solid foundation to explore collaborations in other areas.
9. Some of Singapore’s excellent partners include Emirates National Oil Company (ENOC) and Horizon Terminals since the 2000s; and these companies continue to have a strong presence in Singapore. In another collaboration, Singapore’s GIC invested US$600 million in Abu Dhabi National Oil Company’s (ADNOC’s)’ crude pipeline infrastructure in 2019.
10. We have room to grow and great potential to tap on our countries’ respective strengths, and to expand the scope of our collaborations. For instance, Singapore’s position as Asia’s largest as well as the 3rd largest oil trading hub in the world is complementary to the UAE’s state-of-the-art cargo facilities and large commercial storage capacities in the Middle East.
11. In addition, the Fujairah Oil Industry Zone holds one of the Middle East’s largest commercial storage capacity for refined oil and gas products. Fujairah is also strategically located in the Straits of Hormuz, a major shipping route handling around one-third of the world's waterborne oil. This presents opportunities for us to think outside the box and leverage existing partnerships to strengthen our ties.
12. The co-operation between the UAE and Singapore extends beyond the oil and petrochemical sector. Just two months ago, GlobalFoundries announced the expansion of its wafer fabrication facility in Woodlands, taking its total fixed assets investments in Singapore to US$12 billion.
13. Other areas of mutual interests between Singapore and UAE include opportunities in Innovation, 5G and AI, Space, as well as areas in the green economy such as carbon capture, utilisation and storage, and hydrogen.
14. In May this year, Enterprise Singapore and the Abu Dhabi Investment Office jointly launched an innovation call for solutions to advance the smart city agenda. This aimed to expand economic cooperation between the two markets by increasing collaboration, connecting innovation ecosystems and promoting the exchange of knowledge and expertise between both countries.
15. In another collaboration, Singapore’s Info-Comm and Media Development Authority had also launched an Open Innovation Call to source for 5G solutions in the transport and mobility sector with UAE telco service provider, Etisalat. With such a wide range of collaborations in so many different areas, I have full confidence that the ties between Singapore and the UAE will continue to strengthen and expand in the years to come.
16. We will not be returning to a pre-COVID-19 world. Recovery will take time and it is unlikely to be smooth given the recurring waves of COVID-19 infection globally. Against this backdrop, it is vital that we continue to support each other as we pursue mutually beneficial collaborations through trade and investment. These are critical enablers for global economic recovery.
17. This year marks 36 years of diplomatic ties between Singapore and the UAE. We enjoy close and longstanding bonds between our countries. Events such as today’s webinar provide great opportunities for us to exchange views and strengthen our people-to-people ties. I am confident that the session will be a fruitful and insightful one as we learn from the diversity of each other’s experiences.
18. I wish all of you a very pleasant day ahead. Thank you.