Mr S Iswaran at the Opening Ceremony of OSEA2010 the 18th International Oil and Gas Exhibition and Conference, 30 Nov 2010

SPEECH BY MR S ISWARAN, SENIOR MINISTER OF STATE FOR TRADE & INDUSTRY AND EDUCATION, AT THE OPENING CEREMONY OF OSEA2010 THE 18TH INTERNATIONAL OIL & GAS EXHIBITION AND CONFERENCE ON TUESDAY, 30 NOVEMBER 2010, 1005 HRS AT SUNTEC SINGAPORE

Your Excellencies,

Distinguished guests,

Ladies and gentlemen,

Introduction

A very good morning to all of you and a warm welcome to all our overseas guests. I am pleased to join you at OSEA2010.

OSEA has been held biennially in Singapore since 1976, and it has established itself as a leading oil and gas trade event in the Asia Pacific region.It has grown over the years to become a key regional platform for business networking and knowledge sharing within the oil and gas industry. This year’s event has seen strong participation from technical experts, industry leaders, government officials and representatives from international oil companies (IOCs) and national oil companies (NOCs). I understand that the participation rate has increased by some 15 per cent and this year’s exhibition will be OSEA’s biggest ever.

Strong fundamentals driving growth of Singapore’s marine and offshore industry

OSEA’s growth has paralleled Singapore’s rise in prominence as a global hub for marine and offshore engineering. Singapore hosts a comprehensive oil and gas equipment manufacturing and services sector, which is actively supported by a vibrant marine and offshore cluster.

There are more than 3000 established marine and offshore players, including oil majors, drilling operators, specialized equipment manufacturers, service providers, shipyards, offshore engineering and specialty products companies. These companies undertake a range of activities including headquarters functions, research & development, front-end engineering, manufacturing and technical service and repair.

Despite the global downturn which created some short term uncertainties, the fundamentals for long-term growth remain positive for Singapore’s marine and offshore industry. And with the global economy’s recovery moving onto a firmer footing, the long term prospects for the industry remain bright.In the last five years, the industry has grown at a compounded rate of 18 per cent. In 2009, Singapore’s marine and offshore industry recorded a total output of S$20.1 billion and value-added of S$5.4 billion, with the oil and gas equipment and services sector accounting for S$2.9 billion of the output and the outlook for this year looks promising.

Major yards are seeing a pick up in orders. Singapore’s largest oil-rig maker Keppel Corp has a strong order book of S$5 billion, with deliveries extending to 2Q 2013. In addition, Sembcorp Marine has commenced a large-scale undertaking to consolidate its various operations into a state-of-the-art New Yard.

In the wake of the recent BP Oil Spill in the Gulf of Mexico, it is expected that there will be a step-up of stringent testing and qualification requirements for the industry. Singapore, with its comprehensive cluster of companies, is well placed to support more of such testing and certification activities.

Key oil and gas equipment and services players like Schlumberger, Weatherford, and Cameron hold similar optimistic sentiments.They have all projected a highly positive outlook for their operations in Singapore and placed Asia high on their list of business priorities.

Transformation of Singapore’s marine and offshore industry

Earlier this month, the International Energy Agency reported that global oil demand is expected to reach 87.3 million bpd this year. That demand will be largely driven by Asia. China and India alone are expected to consume almost a third of the world’s energy by 2030. As a corollary, the growth opportunities for the oil and gas industry are and will continue to be in Asia.

As the global market scales up, Singapore’s marine and offshore industry will continue to sharpen its competitive edge. It is already committed to transformation, with an increasing focus on productivity and innovation. This is part of a broader effort for Singapore to shift towards productivity-driven growth over the next decade.Under the auspices of the National Productivity and Continuing Education Council (NPCEC), our economic agencies are studying ways to improve productivity in the marine and offshore industry. This includes automation, capital investment, and manpower training and development to raise the efficiency of processes.

Singapore is also investing further in research and development to support the marine and offshore sector.We recently announced the establishment of a new Singapore Maritime Institute (MI). This Institute is a joint effort of the Maritime Port Authority of Singapore, the Agency for Science, Technology and Research (A*STAR), and the Economic Development Board. Apart from this, A*STAR is supporting research programmes, in collaboration with the universities, to spearhead new developments and innovations in the oil and gas equipment and services sector. Examples of the programmes are high temperature and high pressure materials, ruggedized electronics and multiphase flow and reservoir modeling.

Conclusion

With these measures in place, I am confident that our marine and offshore sector industry will continue to grow and achieve sustainable competitiveness. I wish all participants a productive exchange of ideas at OSEA2010.

Thank you.