Mr Lee Yi Shyan at the Africa Asia Oil And Gas Summit 2013

SMS OPENING REMARKS AT AFRICA ASIA OIL AND GAS SUMMIT 2013

Excellencies,

Members of the Singapore and Africa business community,

Good morning.

I am happy to join you at the inaugural Africa Asia Oil and Gas Summit. This conference is significant of the broader context of Singapore’s role in increasing Asia-Africa trade. After I returned from my visit to Nigeria in 2009, we started the Africa Singapore Business Forum. As the forum is held biennially, we decided that we needed another platform to sustain the effort and momentum in between ASBF. This led to the creation of the Africa Asia Oil and Gas.

COOPERATION BETWEEN AFRICA AND ASIA IN THE OIL AND GAS SECTOR

Africa’s oil and gas industry is a promising one. Recent oil finds in West African countries such as Ghana and gas finds in countries along the continent’s south-eastern coast, Tanzania and Mozambique, have led to optimism about the sector’s growth. Africa presents opportunities for exploration, offshore marine and downstream activities. Asian National Oil Companies such as Petronas and PetroChina have already begun making inroads headway into Africa while companies such as Keppel Offshore & Marine, Sembcorp Marine and Swiber Holdings will find that their capabilities complement the demands there. The presence of the many Asian companies here today signifies our strong interest in Africa.

Africa’s oil and gas development, which is expected to become the world’s second-largest by 2015, are of strategic relevance to Asia’s growth and growing demand. Asia’s rising gas demand has resulted in LNG terminal developments in countries such as Thailand, India, Malaysia and here, in Singapore. In May 2013, Singapore commenced operations of the first LNG terminal in Asia capable of importing and re-exporting LNG from multiple suppliers. Capacity will be expanded from 3.5 million tonnes per annum (Mtpa) to 6 Mtpa by the end of the year. We will also be adding a 4th tank, which will boost capacity to 9 Mtpa by 2016. Such developments are important in diversifying Singapore’s energy sources and Africa is a natural partner in this process. I note Pavilion Energy’s - one of the companies under Temasek - recent acquisition of a 20 per cent stake in Tanzania’s gas fields. This venture is an excellent example of the role Africa has to play in Asia’s energy security.

As African countries firm up their investment policies and construct the supporting infrastructure needed for a thriving oil and gas industry, Asia’s experience over the past century can serve as a possible model. Indonesia, Malaysia and Vietnam have developed a competitive oil and gas industry while Myanmar is just opening up for foreign investment. Regardless of the stages of development, governments face similar challenges in striking a balance between creating an attractive investment climate and safeguarding domestic interests. Careful thought has to be given to ensuring that resource revenues are being channeled towards building a dynamic oil and gas industry, creating jobs as well as advancing economic growth.

SINGAPORE’S EXPERIENCE IN DEVELOPING ITS OIL AND GAS INDUSTRY

Singapore, despite not having any oil and gas resources – some say not yet - can likewise provide a useful model for our African counterparts. The oil and gas industry has been an integral part of Singapore’s economy and one of the key clusters of growth. It contributes to almost 5 per cent of Singapore’s GDP every year. Singapore refines about 1.3 million barrels of oil per day and has evolved to be one of the top three export refining centres worldwide. In 2007, Singapore accounted for 68 million tonnes of the world’s oil exports. Singapore is also the third largest oil products trading hub globally and is the pricing benchmark for Asia’s oil industry.

The vibrant oil and gas ecosystem that you see in Singapore today was built on government foresight and industry collaboration. EDB first identified petrochemicals as a high-growth industry cluster in 1980s. We soon decided to amalgamate 7 islands off the south eastern coast of Singapore, where there were established oil operations, into a petrochemicals hub. The island was called Jurong Island and it has more than 94 leading petrochemicals companies today, with S$42 billion in investments.

Physical infrastructure alone was not enough to achieve our vision of a flourishing oil and gas industry. To complement Jurong Island’s development, we improved our shipping capacity and port infrastructure to support the increasing oil shipments. By 1982, Singapore had become the world’s busiest port in terms of shipping tonnage. We also recognised the importance of human capital, especially in Singapore, where people are our only strategic natural resource. Hence, we invested heavily in developing a skilled workforce to meet the needs of industry.

As Singapore’s oil industry expanded, so did the demand for supporting services. This gave rise to a network of successful home-grown companies in supporting industries in both upstream and downstream oil and gas activities. Two of the world’s largest oil rig builders are Singapore companies. Together, Keppel Offshore & Marine and Sembcorp Marine contribute to 70 per cent of the world’s jack-up rig production and 70 per cent of the world’s FPSO conversion. These companies can export their services to Africa too.

SUPPORTING GREATER AFRICA-ASIA COOPERATION

At first glance, one may say Africa and Asia too far apart. As Ambassador Shabbir Hassanbhai said before, it is closer than you think. In this global age, there is much we can do to narrow the physical and psychological “distance” that exists between Africa and Asia. I am pleased to note that Ethiopian airlines will be launching a direct flight service to Singapore via Bangkok. This will complement the existing flight services offered by Emirates, Qatar Airways and Etihad Airways.

Addressing the psychological barriers and knowledge gaps are just as crucial in growing our bilateral business ties. On this note, I am happy to announce that the Singapore Business Federation and Nanyang Technological University will be signing a Memorandum of Understanding (MoU) to collaborate in the establishment of the Centre for African Studies. This will be the first centre in Southeast Asia focused on research and business case studies in Africa. Housed in the Nanyang Business School, the centre will improve our understanding of Africa’s business climate and provide executive programmes for African and Asian business leaders.

I am pleased to see this idea finally come to fruition, from the time our High Commissioner to Nigeria, Shabbir Hassanbhai, first raised it two years ago. Notably, this centre is a private sector driven initiative, with five founding donors each contributing S$1 million to its establishment. I would also hence like to thank the five corporate donors, for their generosity, faith and the belief in the opportunities in Africa. Please also join me in thanking High Commissioner Hassanbhai for his passion and perseverance in establishing this centre. I look forward to the official launch of the Centre next year.

I wish all of you meaningful discussions and a fruitful forum.