Mr S Iswaran at the Opening Ceremony of Toll Offshore Petroleum Services' Re-Developed Offshore Supply Base

SPEECH BY MR S ISWARAN, MINISTER, PRIME MINISTER’S OFFICE, SECOND MINISTER FOR HOME AFFAIRS AND TRADE & INDUSTRY AT THE OPENING CEREMONY OF TOLL OFFSHORE PETROLEUM SERVICES’ RE-DEVELOPED OFFSHORE SUPPLY BASE, FRIDAY, 17 MAY 2013

Mr Brian Kruger, Managing Director, Toll Group

Distinguished Guests,

Ladies and Gentlemen

Good afternoon.

Introduction

I am happy to join you today for the opening of Toll Offshore Petroleum Services’ (TOPS) re-developed offshore supply base.  Congratulations to Toll on this significant milestone that enhances Singapore’s position as a global logistics hub.  This S$300 million investment has upgraded Loyang Offshore Supply Base into a world-class facility which supports offshore oil and gas exploration and production. 

Global spending on deepwater is expected to double from over US$100 billion in the last five years to over US$200 billion in the next five years.¹ Asia is expected to lead the growth in the number of deepwater wells drilled with a growth rate of 20 per cent.² This means companies will need an efficient base in Asia to undertake activities such as repair and maintenance of specialised offshore equipment, as well as re-supply and mobilisation of offshore vessels.

The marine and offshore sector is an important contributor to Singapore’s economy and it creates high-skilled jobs. The marine and offshore sector in Singapore has come a long way.  Singapore has become an international marine and offshore engineering hub which commands global leadership in the building of jack-up rigs and conversion of tankers.  Today, the sector comprises a diverse cluster of companies, from rig builders to offshore support services providers, and specialised equipment manufacturers.  The marine and offshore sector is important to Singapore’s economy.  In 2011, the sector generated an output of S$12.9 billion and contributed 1.6 per cent of total GDP.  

The sector also provides good career opportunities for Singaporeans in roles such as engineering, HQ professionals, project managers, and project supervisors.  The sector alone employs about 75,000 people and more than 80 percent are skilled workers.³ Mr Jacob Tan, who is amongst us today, is a good example.  In 1997, Jacob joined TOPS as an Operations Executive.  Over the years, he was given opportunities to upgrade his skills and knowledge.  Today, Jacob has risen through the ranks to become a senior executive at TOPS, where he oversees the growth strategies and is responsible for the company’s 160 employees.

As we continue to grow design and innovation activities in this sector, more high value-added jobs will be created.  Singaporeans can look forward to working more on new technologies to make deepwater oil and gas exploration and production more efficient, environmentally friendly, and safer.

Challenges faced by Singapore’s marine and offshore sector

The road ahead, however, has challenges.  Global competition in the marine and offshore sector is intensifying and countries such as China and South Korea are aggressively growing this sector.  To remain globally competitive, companies in this space will need to continue innovating and improving their operations.  This challenge is more acute for Singapore-based companies which face increasing land and labour constraints.  To this end, the Government is committed to help companies which are able and willing to embark on the restructuring journey for higher productivity.

I am therefore heartened to learn of some innovative solutions TOPS has implemented in this facility.  Take for example the ramp-up warehouse.  It is designed to allow 40 foot trailers to mount as high as four storeys.  This means that bulky freight and equipment – typically handled at ground level – can now be stored at higher storeys, which optimise land use greatly.  TOPS also worked with a key tenant, Weatherford, to place part of its open yard and warehouse on the rooftop by reinforcing the floor loading.  

Another example from the sector is Keppel Offshore and Marine.  The company has introduced a robotic welding machine at one of its yards that reduces the man-hours needed to fabricate pipe spools by 25 per cent.

TOPS’ and Keppel’s efforts reflect how companies in the sector can think out of the box and change the way they operate, to do more with less and to ensure that they remain competitive. 

Singapore’s marine and offshore sector is growing its R&D capabilities and specialised talent

To support the marine and offshore community in Singapore, the Government is deepening our knowledge and innovation capabilities.  We continue to invest in R&D to help companies address the challenges of oil and gas exploration and production in deeper waters and harsher environments.  In 2011, the Singapore Economic Development Board (EDB), Agency for Science, Technology and Research (A*STAR) and the Maritime and Port Authority of Singapore (MPA) established the Singapore Maritime Institute (SMI) to coordinate and develop public sector R&D capabilities for this sector in areas such as naval architecture, marine engineering, offshore and subsea systems.  This is a relatively new set-up and I urge the sector to work closely with the SMI.  You can make full use of the capabilities developed by SMI and help to develop innovative solutions that cater to your needs.

Apart from R&D capabilities, specialised talent is also critical to help this sector succeed.  To ensure a healthy pipeline of specialised talent, our schools have launched programmes in marine and offshore engineering as well as offshore oil and gas technology.  In 2005, the National University of Singapore (NUS) introduced Offshore Oil and Gas Technology as one of the specialisations in the mechanical engineering department.  Today, it remains one of the most popular specialisations and there have been more than 300 graduates since its inception.  Two years ago, NUS also launched a Masters programme in Offshore Technology in response to the industry’s demand for more talent.  

Together, our R&D and talent development efforts will help to ensure that companies can continue to succeed in growing their Asian business from Singapore.

Conclusion

Once again, I would like to congratulate the management and staff of Toll on the official opening of TOPS’ re-developed offshore supply base.  Singapore’s marine and offshore sector will benefit from this state-of-the-art facility which is the result of your hard work and vision.  As more companies look for a base to undertake their ancillary activities, the Loyang Offshore Supply Base which houses more than 200 companies serving the offshore oil and gas market will be a compelling choice.

I wish Toll and all your business partners every success in the future.  Thank you.

¹ Douglas Westwood, The World Deepwater Market Forecast 2013 - 2017

² Douglas Westwood, The Challenges of Offshore E&P in Asia Pacific

³ As of 2011