Optimism over business prospects has encouraged a few offshore companies in Singapore to boost yard capacity in the land-scarce island state.
Yard expansion appears to be high on the business agenda for a few offshore companies in Singapore, including Sembcorp Marine Ltd., one of the country’s biggest two players in the sector, as they equipped themselves to tap a larger slice of business opportunities in Asia and beyond.
The expansion seems timely as the global oil and gas industry is expected to boost capital expenditure on exploration and production (E&P) this year to $723 billion, 6.1 percent higher than last year’s $682 billion, Barclay Banks said in a Dec. 9, 2013 equity research report.
Higher Asia E&P Spending
Oil and gas E&P expenditure in Asia is likely to track the global spending, albeit at a slower rate of 2.47 percent in 2014, the Barclays report indicated. Countries in the region are projected to spend around $124 billion, compared to $121 billion in 2013. The E&P estimates were derived from Barclays’ data as well as its research on firms like PetroChina Company Ltd., China Petroleum & Chemical Corp. (Sinopec), China National Offshore Oil Corp. (CNOOC), Petroliam Nasional Berhad (Petronas), Oil and Natural gas Corporation Ltd. (ONGC) and others.
In Southeast Asia, Malaysia and Indonesia – two major petroleum producers in the region – are expected to invest more in the E&P sector. They are likely to have the “greatest forecasted investment in oil and gas, due to increasing urgency of stemming production declines. Both countries are developing shallow water plays, while also moving to deepwaters,” OCBC Investment Research said in a report highlighted in Singapore’s Business Times.
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