The fortunes of the beleaguered offshore and marine industry could turn around in the next two to three years, said industry executive Kristian Siem yesterday.
Mr Siem, the chairman of industrial holding group Siem Industries, noted that the outlook will pick up once the need for oil reserves to be replenished becomes increasingly urgent.
"Nobody knows where oil prices are going. But what is clear is that if oil prices do stay low, there comes a point where growth has to replace the reserves," he said.
"We're consuming twice as much oil compared to the replenishment of oil and that will not sustain itself for very long."
Mr Siem said in the Singapore Maritime Lecture that it is unlikely that oil companies will "sit quiet and continue to borrow money to pay dividends".
"They will begin to look at the reality that they need to replenish reserves. They will see the cost of field developments has come down (such) that they can start developing economically, and therefore, there will be a shift - it's only my guess - in the thinking in the boardrooms leading to more activity in 2018."
For now, however, the name of the game for offshore oil and gas contractors is to preserve cash and make ends meet in today's "abnormal cycle", which has been brought about by oversupply, said Mr Siem. Consolidation among players, he added, will be necessary to bring down operating costs for the industry as a whole.
Mr Siem's comments come as one of his firms, Swiss-based engineering contractor Subsea 7, is due to relocate its regional headquarters from Singapore to Kuala Lumpur, where costs are generally lower.
Other global firms that have moved in recent months include McDermott, Technip and Saipem.
Mr Siem said at a separate briefing yesterday that Subsea 7's planned relocation was a "function of internal situations" at the firm. "There is a bright future for Singapore in being a base for international companies. They will seek to organise themselves out of a place where there is predictability and stability."
The Singapore Maritime Lecture is the anchor event of the week-long Singapore Maritime Week, which was officially opened on Sunday.