Opening Address by MOS Alvin Tan at UAE Singapore Business Council's Oil, Petrochemical and Logistics Seminar

Shaikh Saleh Al Sharqi, Charge D’ Affaires, First Secretary, UAE Embassy in Singapore,

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,

Introduction

1. We are talking today about the age of uncertainty, and this morning we discussed how this age of uncertainty has unfolded. The age of uncertainty is brought about by many different factors. The first factor -  of course, many of you are still wearing your masks – is the age of the pandemic. One which has really upended many of the ways in which we interact with one another. It ushered in digitalisation and also had the impact on supply chains. Then we also have a hot war in Ukraine and Russia and in many different regards, many commentators also said that it's the beginning of maybe a Cold War, and hopefully not a hot war, between the great powers of the US and China.

2. So in this big painting of the new geopolitical environment, pandemic, hot war, cold war, where do we stand and what can we do? We know that this is a very complex environment, a very uncertain environment. And in oil and gas, these prices remain very volatile. if you read the FT this morning, with what's happening in Europe, they say  that prices are almost equivalent to 400 per barrel in terms of oil. So you see that happening throughout, particularly with the coming winter in Europe. And, we already know that this constrained oil and gas prices, due in part to sanctions on Russia, and also the limited production capacity, has placed immense pressure on the oil, petrochemicals and also the logistics sector of which many of you are represented here today.

3. Russia and Ukraine, of course, major exporters of food and other commodities, and the disruption to these exports have had the ripple effect across the supply chain and also global inflation. In fact, in Singapore, the inflation if you look at core, it's about 4 per cent. But that's strange, because it's also half of what we see in the US and Europe. So in many ways, Singapore's trying to help to manage some of these inflationary pressures. We import most of our stuff, but our central bank has tightened monetary policy for four times since October last year. And we are also diversifying all of our exports and diversifying our imports. And that's where our trade industry, with our 27 Free Trade Agreements, come into play.

4. Let me talk a little bit about the UAE and Singapore. UAE and Singapore have generally recovered, or returned to pre COVID-19 normalcy. But as many of you know the trajectory of the pandemic remains very much uncertain. There is potential for the emergence of new virulent strains and new infection waves continue to impact the and pose a risk to the global economy. You know that many parts of the world are very much open, but some parts of the world, including in China and Hong Kong, where they're still pursuing some form of restrictions and a zero COVID policy.

UAE-Singapore collaboration continues to strengthen and advance

5. But the UAE and Singapore relationship continues to strengthen even amidst these challenges. The oil, petrochemical and logistics sectors are important to the UAE and Singapore, and our continued partnership remains important to both sides.

6. The  bilateral trade between the UAE and Singapore recovered quickly from the pandemic and grew by more than 70% year-on-year in 2021. Petroleum oils and crude oils continue to form the bulk of imports from the UAE to Singapore.

7. There is also strong and consistent two-way business interest in the oil and petrochemical sector. For example, Abu Dhabi National Oil Company (ADNOC) has set up two trading offices in Singapore, joining the likes of companies such as the Emirates National Oil Company (ENOC) and Borouge, which have made Singapore a key hub in their global operations. Similarly, Singapore based companies such as Rotary Engineering, PEC Ltd and Consort Bunkers have also made significant investments in the oil-related engineering and logistics sectors in the UAE.

8. The co-operation between the UAE and Singapore also extends beyond the oil and petrochemical sector to include smart city solutions and the digital economy. Last November, for example, Singapore’s Infocomm Media Development Authority (IMDA), Monetary Authority of Singapore (MAS), and Abu Dhabi Global Market (ADGM) piloted the use of IMDA’s TradeTrust Framework to facilitate the transfer of electronic trading documents, such as Bills of Lading, between Singapore and Abu Dhabi. The pilot was conducted in partnership with commercial players such as DBS Bank, Emirates NBD, and Standard Chartered, and demonstrated the digitalisation of cross-border trade financing processes to make trading easier and to promote greater trust, efficiency, and save costs for businesses.

9. Under Dr Brian Shegar’s leadership, UAE Singapore Business Council (SBC) has continued to play an active role in promoting greater trade and investment between both Singapore and the UAE. Following an extended hiatus from the pandemic, the UAE SBC launched a long-awaited business mission to the UAE in March this year to explore opportunities in sectors such as F&B and Infocomm Technology. Now that our borders have re-opened, I encourage UAE SBC and its partners to launch more of such missions, which are essential to the growth of business and commercial ties between Singapore and the UAE.

Green opportunities

10. As we navigate the global uncertainties, it is vital that we keep sight of the opportunities ahead. As the demand for cleaner energies grow, the oil, petrochemical and logistics sector will continue to explore low-carbon and nature-based solutions. The UAE has been a leading example in this regard, with energy companies such as ADNOC and Masdar leading the way to explore low-carbon alternatives in hydrogen and carbon capture, utilisation, and storage solutions. Singapore has also been actively working with industry partners to innovate and develop solutions to reduce carbon emissions, and to build capabilities to handle these new sources of energy.

11. Because of your enterprising spirit, gumption for innovation and strong networks, many companies like yourselves have embarked on green and innovative projects amid volatility and challenges in the sector. I am sure that this seminar will allow us to explore that further. I spoke this morning about our double helix in Singapore as we chart the new economy forward, the double helix is digital and sustainability. And if we focus our eyes on both, I think there are many different opportunities to explore even in an area of uncertainty.

12. I am sorry I can't stay as long as I would like. I also have another hat, and that's the community culture and youth, and I'm looking forward to meeting with the Minister of State in charge of that as well. We have a youth engagement after this as well. And I think it's very important, because even for the oil and petrochemical sector, one of the challenges that we are facing is how do you make it attractive to the next generation of our youth. So we have an Industry Transformation Map which government is working together with industry -  I invited the council to work with us to explore how we can make this sector even more appealing to our youth. That's one, and the second, is to work with the UAE and Singapore to enhance youth and youth interaction so that the next generation look beyond Singapore shores, beyond Southeast Asia  and Asia Pacific shores, toward the Middle East and to exciting areas, jurisdictions and countries like the UAE. So, very much looking forward to this with all of you.

Conclusion

13. To all Singaporeans, a very happy National Day. And to Dr Brian and your council, a very fruitful seminar ahead. We are firmly behind you and we look forward to expanding this relationship together. Thank you very much.