Mr Bob Dudley, Chief Executive, BP,

Your Excellencies,

Distinguished guests,

Ladies and gentlemen,

Good Evening.

 Introduction

1                I am pleased to join you today at BP’s Global Energy Perspectives event.  Bob has provided interesting insights on BP’s views.  Let me complement them by sharing our perspectives from Singapore. 

The Asian growth story will drive the Energy & Chemicals Sector

2                While global macroeconomic conditions are uncertain, the Asian growth story remains a compelling one in general, and for companies in the Energy & Chemicals sector in particular.  The fundamentals for long-term growth in this region remain strong.  Asia’s rising middle class is driving demand for more sophisticated, cost-efficient chemicals as well as cleaner fuel products.  For example, the middle-class in Asia is expected to account for over 60% of the global middle-class by 2030.[1]  Urbanisation, climate change, as well as an increasing need for water and food security are also inextricably linked to growing energy needs. 

3                Against this backdrop, we are confident that Singapore will continue to play a key role as a trading hub and manufacturing base to serve Asia’s growing needs for fuel, chemicals, and materials that are essential for daily life. 

Singapore is committed to strengthen our position as a global trading hub

4                Singapore is situated at the crossroads of major producers and consumers in Asia, and home to 80% of the world’s leading commodities trading companies.  In 2016, our commodities trading turnover was close to US$900 billion.  The sector also contributed about S$24 billion in local business spending, creating spin-offs to adjacent sectors such as finance, logistics and insurance.  We continue to strengthen our position as a global trading hub by building a strong network of producers, buyers and traders.

5                Today, Singapore is the world’s largest marine bunkering hub.  It is also the location for price discovery of oil in Asia.  These underscore the important role that Singapore plays as a trading hub.  With the emergence of Liquefied Natural Gas (LNG) as a major fuel of the future, industry players have also recognised Singapore’s potential to emerge as the Asian LNG trading hub in the next 5 to 10 years. 

6                The Asia Pacific region currently accounts for more than 70% of global LNG demand.  Our vibrant ecosystem positions Singapore well as a financial intermediation and decision-making hub for LNG transactions.  For example, there are 40 LNG companies with trading or business development activities in Singapore, complemented by industry service players, such as law firms, ship brokers, and Price Reporting Agencies (PRAs).

7                Moving forward, we also expect to see more spot transactions in the LNG market.  We will continue to enhance Singapore’s value proposition for the neutral price formation for LNG in Asia.  For instance, in 2015, the Singapore Exchange (SGX) and the Energy Market Company (EMC) launched the SGX LNG Index Group (Sling) – LNG spot price indices for Asian LNG. 

8                I understand that BP was one of the first energy majors who originated new long-term LNG contracts from Singapore, in addition to engaging in short-term and spot LNG trading.  BP has also built up one of the largest LNG trading teams in Singapore.  We look forward to partnering leading companies, like BP, to capture opportunities from the growing Asian market.

Singapore will continue to invest in advanced manufacturing to position our manufacturing sector for the future

9                While BP is better known as a leading commodities trader, the company also played an important role in the development of Singapore’s manufacturing sector.  More than 50 years ago, BP invested in the Maruzen Toyo Oil Company’s refinery, which was Singapore’s second refinery back then.  This was followed by BP’s joint investment in Singapore’s fifth refinery on Pulau Merlimau in 1979.  While no longer under BP’s stewardship, the Pulau Merlimau refinery remains active today.

10             Manufacturing continues to be a key pillar of Singapore’s economy.  Energy & Chemicals manufacturing accounted for about a fifth of our manufacturing value added in 2016 and employs around 25,000 people. 

11             The advent of advanced manufacturing technologies, such as robotics, additive manufacturing and the Industrial Internet-of-Things, is transforming the manufacturing sector, changing the way products are created, and how supply chains are organised.  More companies are leveraging these technologies to continuously collect, analyse and disseminate data from their manufacturing processes to achieve greater flexibility and higher productivity.

12             The Committee on the Future Economy (CFE) has recommended that Singapore aims to build a globally competitive manufacturing sector at around 20% of GDP over the medium term, and identified advanced manufacturing as one of the growth areas for Singapore. 

13             In particular, we want to encourage more companies to partner us in harnessing technology to serve the growing Asian market.  To this end, the Government has committed S$3.2 billion for Advanced Manufacturing and Engineering (AME) as part of our Research, Innovation and Enterprise (RIE) 2020 plan.  The Singapore Economic Development Board (EDB) is also working closely with manufacturers and other government agencies to deploy advanced manufacturing technologies in their Singapore operations.    

14             For instance, to support the adoption of advanced manufacturing technologies, the Agency for Science, Technology and Research (A*STAR) is setting up model factories at the Singapore Institute for Manufacturing Technology (SIMTech), as well as the Advanced Remanufacturing and Technology Centre (ARTC).  These model factories will provide a learning environment by showcasing interoperability solutions and allow companies to test-bed and co-develop digital solutions.  This reduces uncertainty for companies by providing first-hand experience and a better sense of the benefits of such technologies. 

15             Another initiative is the National Additive Manufacturing Innovation Cluster (NAMIC), set up in 2015, which oversees the Nanyang Technological University’s (NTU) Singapore Centre for 3D Printing, the National University of Singapore’s (NUS) 3D Printing initiative for medical technologies, and the Singapore University of Technology and Design’s (SUTD) Digital Manufacturing and Design Centre.  NAMIC plays an important role in forging public-private partnerships to translate additive manufacturing research into commercial applications for industry.  Since its inception, NAMIC has actively engaged more than 380 companies and institutions, and supported several promising projects by our SMEs and start-ups. 

​Partnerships and collaborations are key to our industry transformation efforts

16             Amidst a confluence of economic and technological trends, we believe partnerships and collaborations are key to transform and grow our economy.  Under our Industry Transformation Maps (ITMs), companies, education and training providers, trade associations, and government agencies will develop and implement a comprehensive set of strategies to enhance growth and competitiveness, through innovation, internationalisation, productivity, and skills development.  ITMs are being developed for 23 industries which cover 80% of our economy, including for Wholesale Trade and Energy & Chemicals. 

17             The key to success in this effort lies not only in drawing up good plans, but also in sustained and effective execution. Hence, we need the alignment of all stakeholders – unions, businesses and government agencies – and partnerships are key.  In particular, our emphasis is on partnerships within industry between large companies and SMEs; partnerships between industry and government to harness the broad capabilities in the public and private sectors; and international collaborations given the scale and complexity of the challenges we face today.

Conclusion

18             Let me conclude on this note of partnership.  BP is our long-standing partner, and I would like to thank Bob and the BP team for your continued confidence in Singapore.  We look forward to many more years of successful partnership with BP.  I wish you all a pleasant evening ahead. Thank you.

​