Singapore oil and gas experts have optimistic outlook
A new DNV GL report surveyed 921 senior oil and gas players in Singapore. Results show that almost three quarters (74%) of respondents agree that the industry will be successful in further reducing costs in 2016 – 9 percentage points higher than the global average of 65%.
In Singapore, 37% of respondents state that the most prioritized measure to impose stricter cost controls is to reduce headcount, up from 14% in 2015, signalling further job losses. However, 29% of respondents will prioritize optimizing the efficiency of production from existing assets.
Sixty-one per cent of Singaporean respondents (versus 59% globally) are looking to achieve greater standardization of tools and processes in 2016. Of the open-ended responses, design and manufacturing/production (both 12%) were named as the primary focuses for increased standardization during the year ahead.
Arve Johan Kalleklev, regional manager for South East Asia, DNV GL – Oil & Gas, says: “Singapore’s oil and gas professionals remain cautious about the business outlook but it is encouraging to see that the vast majority believe their organizations were successful in meeting cost-efficiency targets in 2015. However, more job cuts can be expected to control costs. The good news is that Singaporeans are balancing this with a longer-term view of cost management; optimizing the efficiency of production and greater standardization of tools and processes are being cited as important ways to drive cost-efficiency.”
Even in the current price environment, 58% of respondents in Singapore state that their organization’s response to the downturn in the area of innovation and R&D is focused on creating long-term value – 9 percentage points higher than the global average.
For more than half of the Singaporean respondents (53%), the most important strategy for maintaining innovation in a cost-pressured environment is to increase collaboration with other players (compared to 45% globally). To a greater extent than their global counterparts, respondents in Singapore also want to collaborate through joint ventures (38% vs 22% globally) and have greater involvement in joint industry projects (37% vs 30% globally).
The areas prioritized for innovation or R&D in 2016 will be LNG/CNG/gas production (17% in Singapore, versus 20% globally) and mooring /FPSOs (17% in Singapore versus 2% globally).
Elisabeth Tørstad, CEO of DNV GL – Oil & Gas, says: “Innovation and collaboration are even more important in this current price environment. It isn’t just about finding the breakthrough technologies – although that’s important too – it’s also about making things simpler and more efficient and ultimately helping the industry to safely cut costs. At DNV GL, we are continuing to invest 5% of our revenue in R&D as we see this as a key enabler for sustainable long-term competitiveness.”