LONDON, UNITED KINGDOM, April 30, 2014 /EINPresswire.com/ -- It is almost 50 years since Singapore was ousted from its transitory federation with Malaysia and began its startling transformation into a mega-metropolis. Yet, a number of headwinds are engendering business leaders of offshore and oilfield service companies to actively question and debate whether Singapore is the best and most sustainable country to operate from. This new free report from EnergyBoardroom, available to download today, looks at the way Singapore is attempting to pivot into new arenas in order to stay competitive, and keep companies interested in what the city-state has to offer.

Kishore Mahbubani, dean of Lee Kuan Yew School of Public Policy and one of the pre-eminent voices on Asia’s road to modernity states, “Arguably, Singapore’s greatest existential challenge is that it cannot stop running – it is on a treadmill. As soon as a competitor out-competes Singapore in a particular industry, we need to move on and do other things. Singapore will always be a price taker and never a price maker.” Such sentiment reflects the notion that the Little Red Dot’s oil and gas industry cannot compete on all fronts in a dynamic and changing world.

The Achilles’ heel of Singapore as an offshore and oilfield services hub lies in the lack of Screen Shot 2014-04-24 at 17.56.01land space, which in turn has ratcheted up costs. This challenge has become more pronounced as the Little Red Dot has become increasingly crowded and a playground for the world’s super rich. Indeed it appears that Singapore is growing its own money tree: a Boston Consulting Group study conservatively estimated that 11.4 percent of Singaporean households are millionaires, the largest proportion in the world.

Backed by top-down initiatives, such as the Global Trader Program (GTP), which subsumed the then Approved Oil Trader Program, fiscal incentives are drawing ‘software’ driven companies to the Lion City. In 2012, Singapore lured Trafigura to move its legal trading headquarters from Geneva. The Singaporean authorities launched the Global Trader Program in 2001, which offers a corporate tax rate of 10 percent to traders. Trading houses can qualify for a 5 percent rate if they commit to meeting certain local staff hiring levels and make significant use of Singapore’s banking services. Ostensibly, it appears oil and gas executives view Singapore as the perfect location to conduct regional business development and strategy; but its future as a base for manufacturing and storing large physical offshore and oilfield assets, although by no means dead, appears bleak.

Singapore may have intrinsic value for these companies by continuing to offer excellent opportunities as a location for regional headquarters, however. “We have regional and global clients and when one thinks of a hub, the value chain network first and foremost has to be there. Singapore, despite having no indigenous energy resources, is the pre-eminent hub for clients because of its infrastructure and well-connected regional platform,” emphasises Pek Hak Bin, the head of KPMG’s Energy & Natural Resources branch. In 2013, KPMG chose to locate their Global Energy Institute in Singapore. The institute is the first international expansion of the original institute in Houston and is both a clear indication of Asia and Singapore’s growing importance in the global energy landscape.

In another bid to maintain a solid footprint in the offshore industry, Singapore is also channeling a lot of effort into building its offshore and oilfield R&D capabilities. Singapore’s research centers are largely driven by academic institutions, government agencies and local companies such as SembCorp and Keppel. In 2010, Singapore’s A-STAR and local universities began to collaborate to develop R&D capabilities in oil and gas equipment sector to support local marine and offshore industry.

Ultimately though, new ideas and initiatives can drive a first-mover competitive advantage. With the completion of Singapore’s first LNG Terminal, the LNG arena appears to be the latest niche market that the Lion City believes it can sink its teeth into.

Featuring:

Kishore Mahbubani, Dean – Lee Kuan Yew School of Public Policy

Pek Hak Bin, Partner, Head Of Energy And Natural Resources – KPMG

Tim Rockell, Director, Global Energy Institute – KPMG

Jean-Marie Guillermou, Senior Vice President, Asia Pacific – Total E&P

Ajit Menon, Managing Director, Southeast Asia – Baker Hughes

Eric Simon, CEO – GDF Suez Trading Singapore

Craig McMahon, Lead Analyst Asia Upstream Research – Wood Mackenzie

Nicholas Brown, Senior Analyst, Asia Gas & Power – Wood Mackenzie

Michael Chan, Managing Director – Braemar Offshore

Michael Comi
Focus Reports
+44 203 356 4889
email us here

Legal Disclaimer:

EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.