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Singapore: a new focus on technology and research

Speaking at the opening ceremony of the Offshore Southeast Asia Conference and Exhibition (OSEA) in November 2012, Second Minister for Trade and Industry S. Iswaran highlighted that “with rising offshore drilling and production activities, the demand for offshore rigs, platforms and support vessels is set to increase. Singapore is well placed to ride this offshore wave as our shipyards have built up a sound track record of providing cost-effective, safe and timely deliveries. We are also able to meet customer’s needs by offering a full spectrum of customized products and in-house proprietary designs for offshore rigs.”

Singapore’s supremacy in rig construction could, however, be diluted: its yards must now contend with existing competition from established Chinese yards such as Cosco Corporation (which have recently gained significant traction in rig building through aggressive pricing), as well as South Korean yards. In addition to this, they must also compete with new players that have moved into the sector due to a glut in yard capacity in Asia from the downturn in shipbuilding.

Nevertheless, Singaporean rig builders appeared unfazed by the competition from Asia as the flow of new orders continues. During the first nine months of 2013, Keppel heads forward with a USD 10.95 billion order book. The company is slated to deliver 20 offshore rigs this year, a record number for any shipyard worldwide.

Despite the stiff cost competition, Choo Chiau Beng, CEO of Keppel Corporation, expects that offshore clients will place greater emphasis on having products delivered on time, rather than risking the costs associated with project delays. “Chinese yards were desperate because they ran out of conventional ships to build,” Choo told Bloomberg News. “They were offering crazy terms to attract customers.”

Bobby Wong, country manager at the American Bureau of Shipping (ABS) Singapore, states that “although cost is an important consideration for rig owners, brand track record and quality are also key concerns. In this regard, Singapore has earned its recognition as the hallmark of safety, quality and innovation in the marine and offshore industries.”

As a leading marine and offshore classification society and key partner of Keppel and Sembcorp in Singapore, Wong highlights his company’s role in helping clients to achieve some of the industry’s fastest rig delivery times. “As an integral part of the production process, ABS has a dedicated team of proactive surveyors and engineers on the ground that provide customers with the full range of services in a timely and efficient manner while maintaining the highest attention to detail. Our efforts support our clients’ ability to consistently deliver quality and reliable assets on schedule or even ahead of schedule, as is often the case. The potential losses that would result from delayed projects help to offset the cost premiums relative to the competition.”

Simultaneously, Singapore’s yards are moving up the technological ladder and focusing on niche market segments that require significant investments in R&D and innovation. For instance, Keppel Offshore & Marine (Keppel O&M), and ConocoPhillips are jointly designing a first-of-its-kind ice-worthy jack-up rig to operate in the Arctic Seas, one of the harshest marine frontiers.

This push towards innovation and R&D is also supported by a slew of international organizations in the industry that have made significant investments in establishing knowledge and research centers in Singapore. Other world leading classification societies that have recognized the benefits of locating their activities alongside their clients. Det Norske Veritas (DNV), for instance, has established two technology centers in Singapore; the Clean Technology Center and the Deepwater Technology Center, in 2010 and 2012, respectively. Ernst Meyer, vice president and regional manager for DNV Southeast Asia and Pacific, notes that these investments were “a result of DNV’s ambition to continue along its growth path and spread its innovation genes instilled in the company towards Asia. Historically, our Asian operations have not played a big role in innovation but this is something we intend to change.”

Meyer goes on to explain that “this corresponds well with Singapore’s national ambition to be a regional competence center for deepwater and clean energy technologies. As such, we have been working closely with the EDB in order to realize this shared ambition.”Fugro,

As a company associated with offshore survey, site investigations and engineering works, Fugro has also grown into a globally recognized technological leader. For its Singaporean offices, 2013 marks 40 years since incorporation. Jerry Paisley, regional manager for Asia Pacific Offshore Geotechnics, Fugro, explains the regional offices role in promoting innovation and R&D.

“The National University of Singapore (NUS) has a Center for Offshore Research & Engineering (CORE) which carries out a significant amount of research programs. The establishment of CORE in 2003 marked the first step in NUS’s plan to help shape the development of Singapore into a center for offshore and maritime research. Within the few years since its inception, CORE has established strong links with the offshore oil and gas industry, and has established an enviable track record in R&D and education in offshore technology. The high-end research topics taking place there today are mainly centered on the engineering space, as opposed to exploration and production, and ranges from arctic engineering to methane hydrate research.

“In that respect, Fugro engages in and funds a number of joint industry projects with various research and academic institutions and industry players. With over 130 jack-up rigs in operation in the Asia Pacific region, we carry out a good deal of survey and geotechnical engineering work to ensure the safety of the sites. Because it constitutes such a large proportion of our work, we are conducting a fair amount of research into improving the prediction and avoidance of jack-up punctures and are actively funding these joint industry projects with NUS.”

Similarly, Lloyd’s Register has recently inaugurated its Global Technology Center in Singapore, one of two in the world exclusively focused on the energy sector. Although only inaugurated in September 2012, Claus Myllerup, senior vice president of energy technology at Lloyd’s Register, outlines the advancements the GTC has already made. “We have made significant contributions towards publishing the first floating offshore rules in terms of structures that can be used for drilling units from a safety and operational view point,” he says. “In addition to this, we are in the process of developing some rather interesting concepts in relation of subsea units and the ways in which they can be monitored and in turn interpreted. Furthermore, we are working closely with a number of universities and A-Star to provide insights for the very large hydrodynamic test facility that is being built here.


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