Distinguished guests,

Ladies and gentlemen,

Good morning.

 

Introduction

1.            I am pleased to join you today at the opening ceremony of the 21st International Oil & Gas Industry Exhibition & Conference 2016 (OSEA 2016).  OSEA is a well-established event for the Oil and Gas (O&G) industry, and I am glad to see the range of firms, from local to international players across different parts of the O&G value chain, participating in OSEA2016.

2.            For a country lacking natural resources, Singapore has achieved much in the O&G industry.  For instance, we are the world leader in Floating Production Storage Offloading (FPSO) conversions, as well as the largest manufacturer of jack-up oil rigs.[1]  These achievements come on the back of our well-established Marine & Offshore Engineering (M&OE) ecosystem, which include home-grown companies that have become global players, as well as leading international companies that have made Singapore a base for their regional headquarters and operations.

 

Despite the current industry headwinds, the long-term outlook for the Marine & Offshore Engineering (M&OE) industry remains positive.

3.            This event takes place at a time where the M&OE industry is experiencing a deep and prolonged slowdown as a result of cyclical and structural forces.  Consequently, the industry’s financing challenges have intensified in recent months.

4.            Some industry consolidation is inevitable as companies restructure and adapt to the challenging environment. However, it is important that we preserve the industry’s core capabilities that have been developed over the years as they will be important to seize further opportunities. This is why we have recently announced targeted measures to facilitate M&OE companies’ access to working capital and financing.

5.            Even as we grapple with the current challenges, we should continue to build capabilities for the long-term and be ready for the next up-cycle.  The long-term outlook for the M&OE industry remains positive as the fundamentals of growing energy demand remain unchanged, and energy prices are expected to recover as the market rebalances. 

 

Building capabilities to harness growth opportunities in areas such as Liquefied Natural Gas (LNG)

6.            Furthermore, as global efforts to lower carbon emissions intensify, demand for Liquefied Natural Gas (LNG), which emits around half the amount of carbon dioxide compared to coal for the same amount of energy generated[2], is expected to increase.  Indeed, global demand for LNG is projected to rise from 250 million tonnes per year to 400 million tonnes per year in the next two decades.  Asia Pacific, which currently accounts for over 70% of global LNG demand, will likely drive the continued demand for LNG. [3]

7.              Against this backdrop, Singapore continues to invest heavily in expanding our LNG refining and storage capacity.  For instance, Singapore’s fourth LNG storage tank is slated to be completed in 2018.  At 260,000 cubic metres, this new storage tank will be among the largest in the world[4], and will increase our throughput capacity from six million tonnes per annum to around eleven million tonnes per annum.  Coupled with our ongoing efforts to build a second LNG terminal, I am confident that Singapore is well-placed to establish itself as a major LNG hub in the region.

8.            Our home-grown companies are also developing capabilities and building up their track records to capture opportunities in the growing LNG market. One example is the joint venture between local firm Sing Swee Bee Group (SSB) and Spanish firm GABADI, for which the signing ceremony is taking place shortly after. SSB is one of only four companies in the world certified by Gaztransport & Technigaz (GTT), the global leader in new built LNG carriers, to render LNG membrane tests for its cargo containment system.  GABADI is the first company to obtain a license from GTT for outfitting LNG membrane vessels.  This joint venture will help to deepen our capabilities in the construction of small-scale LNG membrane vessels, as well as LNG membrane repair.  

 

Supporting Singaporeans through economic restructuring and transformation

9.            As our economy undergoes restructuring and transformation, the Government will continue to support Singaporeans to upgrade themselves. For instance, we introduced the Adapt and Grow initiative in May this year, where Workforce Singapore (WSG) increased the number of Professional Conversion Programmes (PCP), including one for the M&OE industry, to reskill local mid-career workers and help them embark on new careers both within and across industries.  WSG has also enhanced the Career Support Programme (CSP), which encourages employers to hire suitable professionals through the provision of wage support, and expanded P-Max, a programme which helps to place professionals into suitable job roles in Small and Medium Enterprises (SMEs).  Such efforts will help Singaporeans better adapt to the changing job demands and develop new skills. I strongly encourage companies and individuals to take advantage of these programmes to better prepare themselves for the future.    

 

Conclusion

10.         In closing, the M&OE industry remains an important part of Singapore’s economy, and the Government stands committed to invest in its future.  OSEA2016 provides a timely opportunity for industry players to share ideas and discuss solutions to help the industry emerge stronger from these challenging times.  I wish you all fruitful discussions at this conference. Thank you.