SINGAPORE - Amid one of the worst downturns in the global oil and gas industry, Singapore's offshore and marine firms raked in a total turnover of S$14.73 billion in 2015, according to the President's Report from the Association of Singapore Marine Industries (Asmi) out on Tuesday.
This was a 14.5 per cent fall from the record S$17.23 billion in the year before - but still a "respectable performance" given the difficult market environment, said Asmi president Chow Yew Yuen in his report.
Mr Chow, who is also chief executive of the world's No.1 rigbuilder Keppel Offshore & Marine, noted that this is the fourth downturn for the industry here since it ventured into the offshore market in the early 70s.
This downturn, he added, is expected to be "more protracted compared to the earlier ones".
"The impact of the current downturn on industry members both globally and locally is severe, and there have been retrenchments, consolidations, mergers and acquisitions as well as negative growth and losses for some," said Mr Chow.
Of the S$14.73 billion, S$9.57 billion or 65 per cent came from the offshore and rigbuilding sector, which has been the largest contributor to the industry's overall turnover since 2008.
The ship repair and conversion sector brought in S$4.86 billion, accounting for 33 per cent of the topline, while the shipbuilding sector contributed S$290 million, or 2 per cent.
The report noted that Singapore shipyards secured some S$4.9 billion in new orders during the year - a 49 per cent dive from the S$9.7 billion in new orders booked in 2014. Majority of them were for non-drilling solutions.
The total order book for the industry stood at around S$19 billion as at the end of last year, with deliveries stretching to 2020. This is 20.6 per cent down from the S$23.93 billion as at the end of 2014.
On the employment front, the industry's workforce was made up of 95,500 workers last year, which is 11,100 workers or 10.4 per cent lower than the 106,600 in 2014.
"The constraint on foreign worker intake from tightening of work permit quota, fewer new contracts clinched due to low oil prices and economic slowdown and natural workforce attrition, contributed to the drop in total employment in the industry in 2015," said Mr Chow.
Meanwhile, prospects for the offshore and marine market remain challenging.
"Moving into 2016, there were projects deferment and cancellation as oil companies seek to conserve cash to ride out the downturn," said Mr Chow. "The continuing mismatch between a global supply glut and sluggish demand in a fragile world economy is expected to keep oil prices subdued in the near future."
But he added that the long-term fundamentals continue to be strong. "The reduced level of drilling activities will result in a fall in supply and depletion of oil reserves while increased urbanisation and a growing middle class population globally will continue to stimulate global demand for energy. Oil companies will at some point, have to replenish their reserves."
Said Mr Chow: "Oil prices will eventually have to reach a new equilibrium, although no one can predict with certainty when that recovery will be.
"Nonetheless, companies should brace themselves for a longer downturn by staying prudent and ensuring that overheads are under control, as well as by rightsizing their operations to stay optimal."