Baktee
The stormy economic weather has continued to pound oil-rig companies in the marine and offshore engineering (M&OE) industry over the past three years, with low-production demands coupled with oil prices falling to new lows.
Oil prices fell from the high of S$148 per barrel in 2014 to below S$40 in early 2016. Rig builders have also seen low orders for drilling rigs in that period, according to reports by mainstream media.
The downturn in the industry has hit workers hard, with retrenchments running a figure of somewhere between 30,000 to 40,000 in the two years before 2017.
Although oil prices have recovered to a certain degree today, estimates by giant management consulting firm McKinsey showed that most oil companies remain cautious in the exploration and production (E&P) activities, and have shrunk their spending on E&P by 45 per cent over the last five years.
Weathering the Storm
Singapore’s marine and offshore engineering (M&OE) industry has felt the impact of this global downturn. Despite this, the industry has charted a new course for itself.
The goal now is to grow its value by $5.8 billion and create 1,500 new jobs by 2025, with a new industry transformation map (ITM) launched on 22 February 2018 by the Government, Labour Movement, associations and industry leaders.
In 2016, the industry contributed S$3.6 billion to Singapore’s GDP, S$12.3 billion to Singapore’s total manufacturing output, and employed 23,000 local workers.
Strategies in the transformation map include equipping Singaporeans with relevant skills, preparing for an industry upturn through innovation and productivity, promoting closer cooperation between unions and associations, and pursuing new growth areas in the industry.
“Looking ahead, global energy consumption is expected to continue increasing, which will help re-balance supply and demand in the oil and gas market.
“The industry can be cautiously optimistic about longer-term prospects if we can deepen our capabilities to seize opportunities on the horizon,” said Trade and Industry (Industry) Minister S Iswaran, who launched the map at Jurong Town Hall.
Moving Industry with Innovation
For the industry to remain competitive globally, companies need to invest in advanced manufacturing, which includes robotics and automation to improve productivity, added Mr Iswaran.
The Government has also committed S$3.2 billion investments to research and development in advanced manufacturing under the Research, Innovation and Enterprise 2020 plan, and will also support companies that are developing solutions and technology through research institutes like TCOMS (Technology Centre for Offshore Marine Singapore).
Investing in Human Capital
Although the M&OE industry plans to transform with new technology, nothing much can be done without a strong and skilled workforce driving it forward.
To ensure workers move in tandem with the industry transformation, there is also the Skills Framework for Marine and Offshore, developed by government agencies, unions and education providers.
The framework provides vital information on trends, career pathways, occupations and job roles. It also highlights the skills and competencies needed in the industry’s growth areas such as digital products and services.
The Shipbuilding & Marine Engineering Employees’ Union (SMEEU) will be playing a pivotal role in engaging employers about the framework. The union will be helping companies design resource management initiatives and talent development plans.
“We are glad that the industry is gradually en route to recovery. SMEEU will work with our partner companies and stakeholders to strengthen the Singaporean workforce through retraining and deepening of skills of the employees.
“We hope to retain and attract more Singaporeans to join the industry through more structured career progression coupled with competitive basic wages,” said SMEEU President Tommy Goh.
There will be other existing and upcoming training support initiatives as well, including the SkillsFuture Series by SkillsFuture Singapore, new Earn-and Learn Programmes focusing on robotics and automation by Temasek Polytechnic, a new Work-Learn Technical Diploma in Marine and Offshore Engineering by ITE, and the Adapt and Grow Marine Professional Conversion Programmes.
Main Photo: EDB
