1. business and industrial
2. energy
3. oil

Moore Stephens - BNP PARIBAS
Singapore Shipping Forum 2015
Shipping 2020 and Beyond
Thursday 23 April 2015
InterContinental Hotel
Moore Stephens together with BNP PARIBAS,
held its annual flagship event, the Singapore
Shipping Forum 2015, at the Intercontinental
Hotel on 23 April 2015. The forum was held in
conjunction with the Singapore Maritime
Week 2015, an event supported by both the
Singapore Shipping Association and the
Maritime and Port Authority of Singapore. The
session was well-attended by some 250
delegates from the maritime industry.
Mr. Esben Poulsson, Honorary Secretary,
Singapore Shipping Association, Chairman of
Enesel Pte. Ltd. and Avra International Pte. Ltd
opened the Forum and invited prominent
speakers to give their views on Geopolitical
Trends, The Impact On The World Economy
and How The Shipping Industry Is Responding
To These Developments.
Mr. Esben Poulsson, Honorary Secretary, Singapore
Shipping Association, Chairman, Enesel Pte. Ltd and
Avra International Pte. Ltd
(L) to (R): Mr. John D’Ancona, Clarkson Asia Pte Ltd, Mr. Matthew Forrest, BNP PARIBAS, Mr. Christopher Kingsley-Wilkin,
Grindrod Shipping Pte Ltd, Mr. Iain Young, Stephenson Harwood, Mr. Arnold Wu, BNP PARIBAS, Mr. Esben Poulsson,
Enesel Pte Ltd, Mr. Mick Aw, Moore Stephens LLP, Amb. K Kesavapany, Singapore International Foundation, Mr. Paul
Stevens, Navig8 Group and Mr. Mark Walton, BNP PARIBAS
Delegates at the Singapore Shipping Forum 2015
1
Moore Stephens - BNP PARIBAS, Singapore Shipping Forum 2015
The Evolving Geopolitical-Economic
Scenario in the 21st century
“Power is shifting from the Atlantic to the
Pacific, and a new Asia-centered economic
system is evolving” said Ambassador K.
Kesavapany, Governor of the Singapore
International Foundation, who spoke on the
rise of China and the perceived weakening of
the US presence. He referred to the Asian
Infrastructure Investment Bank (“AIIB”), a sign
of growing Chinese strength, and discussed
the consequences of rising Chinese economic
and political power.
Not least among these consequences is the
conflict in the South China Sea. There are
grave concerns that disputes over the right of
passage, sea and airspace communication and
travel, and the ownership of undersea mineral
Amb. K Kesavapany, Governor, Singapore International Foundation, Former Singapore Permanent Representative,
United Nation in Geneva
Black Tide:
The Ebbs and Flows of Global Oil
Other drivers include the US monetary policy
which affects all commodity prices. In Mr.
Walton’s view “commodity prices including
resources, might lead to unforeseen conseOil prices are likely to stay low, in the view of
oil are set to remain under pressure as the
Mr. Mark Walton, Senior Economist at BNP
dollar rally continues...” Slowing Chinese
Already, Asian countries including China, are
Paribas. This is because the drivers of declining
industrial production is yet another long-run
expanding their naval assets, even as the US
oil prices are not likely to reverse soon.
drag on oil prices. The tight historical relation-
quences.
ship between Chinese industrial growth and
aims to increase its naval and other military
presence in this region. Quoting Samuel
The supply shock arising from increased US oil
crude oil prices will exert further downward
Huntington on the “Clash of Civilizations”,
production is one such driver. This increase,
pressure on oil prices as Chinese industrial
the Ambassador warned that the outcome of
together with OPEC’s decision to let the
production growth, currently at 7 to 8%,
these developments are becoming difficult to
market decide the level of oil prices has
declines at an accelerating pace. Soaring US
predict.
entrenched an outward shift in the global
oil inventories in excess of over 50 million
supply curve, according to Mr. Walton. He
barrels, resulting from surging oil production
However, the rise of China has also given rise
estimated that supply factors account for
in the US, are also suppressing crude oil
to positive economic consequences. Among
about 50% of the drastic decline in oil prices.
prices.
these are the revival of trade routes, including
the new overland Silk Road, which will have
positive economic effects for China’s potential
trade partners. It is still uncertain how China
will balance the need for co-operation from
these partners with the South China Sea
conflict, in which some of these partners also
have asserted claims
The Ambassador also touched on other global
issues that may affect shipping, including
terrorism, environmental and climate changes,
and the demand for clean energy.
Mr. Mark Walton, Senior Economist, Asia ex-Japan, Fixed Income, BNP PARIBAS
Shipping 2020 and Beyond
Views from the Bridge:
Looking out towards 2020
The consequences of the US Shale Revolution
on
shipping
cannot
be
underestimated,
cautioned Mr. Paul Stevens, Chief Financial
Officer of the Navig8 Group. The resultant rise
in US crude oil production, which is expected to
reach nearly 10 million barrels a day by end
2016, coupled with rising Asia Pacific refining
capacity, is driving VLCC (“Very Large Crude
Carrier”) tanker demand for West-to-East
crude oil transportation.
Further, Long Range chemical tanker earnings
are being boosted by increased refining capacity in the Middle East, resulting from Middle
Eastern strategic moves to capture more value
from
its
cheap
petrochemical
feedstock
Mr. Paul Stevens, Chief Financial Officer, Navig8 Group
gas developments which are expected to
expects chemical tanker demand to grow at
produce nearly 80 billion cubic feet of gas by
a compound annual growth rate of 7.5%
end 2016.
between 2016 and 2019.
in the third quarter of 2014, and the Yanbu and
Lowered petrochemical production cost is
Mr. Stevens also touched on key financial
Ruwais refineries are expected to become fully
driving the US petrochemical industry to
trends in shipping. He observed that the IPO
operational in the third quarter of 2015. It is
become highly competitive. One area of focus
markets were active in 2014 but have
expected that long-range tanker earnings will
is methanol production, for which 14.2 million
quietened down, although there is still a
benefit from even more long-haul exports from
tons per annum of capacity is expected to come
significant pipeline of shipping candidates
the Middle East going forward.
online by 2018. This development, coupled
awaiting listing opportunities. In his view,
with Asia’s (in particular China’s) growing
only the best companies with a “clear invest-
Other than the Middle East, the US petrochemi-
demand for methanol will result in more
ment strategy and return profile" will
cal industry is also increasingly benefitting from
product carrier demand from the US to China.
succeed.
cheap feedstock costs, thanks to the US shale
As a result of these developments, Mr. Stevens
production.
The Jubail refinery has become fully operational
Shipping Cycles, Now and 2020
Next,
Mr.
John
D’Ancona,
Divisional
Director and Senior Dry Cargo Analyst at
Clarkson
Asia
Pte.
Ltd,
provided
an
overview of current shipping markets and
explained developments that are expected
to impact shipping going forward. World
economic growth is forecasted to improve,
with
consequent
benefits
for
global
seaborne trade. Global seaborne trade per
capita is expected to reach 11 billion tonnes
in 2015. Further increase in trade may arise
due to the development of the Southern
Silk Road and the consequent expansion in
trade south of the Equator, as China invests
overseas to secure its raw material supply.
Mr. John D’Ancona, Divisional Director, Senior Dry Cargo Analyst, Clarkson Asia Pte Ltd
Moore Stephens - BNP PARIBAS, Singapore Shipping Forum 2015
Cheaper commodity prices will help boost
demand for commodities and this will
Shipping:
Back to the Future
benefit emerging economies, which are
trends, shipping profitability and ship prices
over the past 25 years. Based on an analysis of
historical patterns, Mr. Johnson concluded that
likely to experience rising energy demand.
Mr. Chris Johnson, Partner and Head of the
while the recent decline in oil prices will have an
Last but not least, the new Panama Canal
Shipping Industry Group at Moore Stephens
impact on the shipping sector, more significant
will open in 2016 and allow larger vessels to
LLP, next took the stage to demonstrate the
economic and shipping risks tend to emerge
transit.
correlation of oil prices, economic growth
when, and if, oil prices surge again.
Mr. D’Ancona also provided an analysis of
how various shipping sectors will perform
going forward. The tanker sector will remain
profitable, driven by low oil prices and rising
Asian thirst for oil. The containership sector
will recover after five difficult years, as
Western consumption and manufacturing
drive container trades to the West, and slow
steaming techniques mitigate containership
supply issues.
However, the slowing Chinese economy and
the consequent reduced demand for iron
ore and coal present challenges for the dry
bulk sector. Offshore will continue to be a
challenging sector tied to oil prices.
Mr. Chris Johnson, Partner & Head, Shipping Industry Group, Moore Stephens LLP
Opinion Polls
An important part of this year’s forum was the
interactive real-time polling questions from
RYT Polling Solutions. Participants were anonymously polled on diverse issues ranging from
the impact of China on maritime trade, to
most preferred shipping sectors for investment.
Participants
thoroughly
enjoyed
themselves as they experimented with the
versatile polling devices, even as they gained
insights into other participants’ views on the
same shipping topics.
Based on polling results, forum participants
were generally of the view that:
- The South China Sea dispute will escalate
further but this will not impact sea passage
Ms. Lao Mei Leng, Partner, Moore Stephens LLP and Mr. Dimitris Belbas, Managing Director, Eurofin Group Holdings
Pte Ltd organised the interactive real-time polling session
4
within Asia
Shipping 2020 and Beyond
- Tensions between US and Russia will escalate
further
- China’s growth over the next 5 years will
slow down gradually or at best, remain at
- Oil prices between now and 2020 will range
from US$61-US$80/bbl
current levels
- Terrorism will be the biggest threat to world
order in 2020, followed by geopolitical unrest
- Tankers offer the best investment opportun- Major risks for world trade in the next 5
ities in shipping
years are asset bubbles, deflation, and
- Asia will be the major driver of growth in
fiscal/debt crises
world trade over the next 5 years
Delegates casted their votes through the interactive real-time polling devices
Panel Discussion
The above topics and other shipping issues
were examined in more detail by a panel
discussion led by Mr. Mick Aw, Senior Partner
of Moore Stephens LLP. Conclusions from
the panel discussion were:
- Key developments in China that are most
likely to affect shipping include the shift
in China’s economy to one led by internal
consumption,
the
South
China
Sea
territorial dispute, and the development of
the New Silk Road
- Oil prices will be driven by geopolitical
tension in the US, OPEC, and Middle East
- Panelists are divided as to the shipping
asset classes in which they will invest.
Panel discussion: (L) to (R) Mr. Mick Aw, Moore Stephens LLP, Mr. John D’Ancona, Clarkson Asia Pte Ltd, Amb. K
Kesavapany, Singapore International Foundation, Mr. Mark Walton, BNP PARIBAS, Mr. Paul Stevens, Navig8 Group and
Mr. Esben Poulsson, Singapore Shipping Association
5
Moore Stephens - BNP PARIBAS, Singapore Shipping Forum 2015
- Shipping sectors and investments cited as
- Access to shipping finance will remain tight
potential investment opportunities include
in the next 5 years, as banks are bound by
dry bulk shipping stocks, container ships,
tighter regulation
tankers, and LPG carriers
Mr. Arnold Wu, co-Head of Transportation Sector, Investment Banking Asia Pacific, BNP PARIBAS and delegates during the Question & Answer Session
Closing Speech
In his closing remarks Mr. Matthew Forrest
thanked all the speakers, panellists and
delegates for a lively interesting forum.
“See you all next year!”
Mr. Matthew Forrest, Director, Shipping & Offshore, BNP PARIBAS
6
Reported by:
Wong Koon Min, Director,
Technical, Compliance and Methodology
Moore Stephens LLP Singapore
Shipping 2020 and Beyond
Delegates at the Singapore Shipping Forum 2015
Delegates at the Singapore Shipping Forum 2015
Delegates at the Singapore Shipping Forum 2015
(L) to (R): Mr. Tim Hartnoll, Chairman, Sea Consortium Pte Ltd, Mr. Hugh Scheffer,
Director, Unicorn Shipping and Mr. Esben Poulsson, Chairman, Avra International Pte Ltd
(L) to (R): Ms. Gina Lee-Wan, Partner, Allen & Gledhill LLP and Ms. Bernice Yeoh,
Group Director, International Maritime Centre Division, Maritime and Port Authority of
Singapore
(L) to (R): Mr. Terence Tan, Head of Energy & Natural Resources, Advisory & Capital
Markets, SE Asia, BNP PARIBAS, Mr. Arnold Wu, Co-Head of Transportation Sector,
Investment Banking Asia Pacific, BNP PARIBAS, Mr. Khalid M. Hashim, Managing
Director, Precious Shipping Public Company Ltd and Mr. Quah Ban Huat, Independent
Director, Samudera Shipping Line Ltd
7
Moore Stephens - BNP PARIBAS, Singapore Shipping Forum 2015
(L) to (R): Ms. Woo Yoon Guan, Chief Accounting Officer, Mr. Suwandy Chen, Golden
Stena Weco and Mr. Mick Aw, Senior Partner, Moore Stephens LLP
(L) to (R): Ms. Marisa Dupuis, Vice President, Shipping & Offshore Finance, Investment
Banking APAC, BNP PARIBAS, Mr. Matthew Forrest, Director, Shipping & Offshore, BNP
PARIBAS and Mr. Jonathan Hill, Managing Director, Tufton Oceanic (Singapore) Pte. Ltd
(L) to (R): Mr. Esben Poulsson, Chairman, Avra International Pte Ltd, Mr. Lim Peng Huat,
Director, Complete Corporate Services Pte Ltd, and Mr. Kuan Kim Kin, Executive
Director (Finance), Pacific International Lines Pte Ltd
(L) to (R): Mr. Haider Nawaz, Managing Director, Red Dot Shipping, Mr. Henry C.
Mytton-Mills, Managing Director, Aries Shipbroking (Asia) Pte Ltd and Mr. Khalid M.
Hashim, Managing Director, Precious Shipping Public Company Ltd
Press Report - TradeWinds
8
Shipping 2020 and Beyond
Press Report - TradeWinds
9
Moore Stephens - BNP PARIBAS, Singapore Shipping Forum 2015
Industry gathers to discuss shipping trend
(Titus Zheng, Published on 24 April 2015)
Shipping trends for the next five years will be linked to macroeconomic factors driven by the US shale oil revolution, China's rising
demand, and falling prices of crude oil, said the maritime community at Moore Stephens-BNP Paribas Shipping Forum 2015. Speaking at the forum, Mark Walton, senior economist in BNP Paribas, highlighted that the recent industrial demand in China has
been sluggish, which was reflected on historical data of the tight relationship between Chinese industrial growth and crude prices.
He explained that with the typically downward trend of oil prices, Chinese industrial production growth is likely to dip below 10%.
So far, Walton observed that over the past year Chinese industrial production has been running at around 7-8% of growth."Oil prices
are likely to be suppressed by surging US and Middle East oil production. This decline is likely to spill over into other
commodity prices as well, such as metals and iron ore," said Walton.
He attributed the recent oil slump to oversupply from the increased US shale oil production as well as the recovering Middle East
production, such as in Libya and Iraq, that boosted the overall global production. Moreover, the Organization of the Petroleum
Exporting Countries' decision not to cut entrenches further aggravated the supply glut situation.
Meanwhile, K Kesavapany, ambassador and governor of Singapore International Foundation (SIF), agreed with Walton on the rise of
China and its impact on trade and oil demand.He viewed that China's policies and recent actions in the South China Sea posed
concerns on sea lanes and airspace access, the right-of-passage, communication, and travel, as well as the ownership of undersea
mineral resources.Kesavapany, the former Singapore Permanent Representative to the United Nations, also pointed out that the
rising non-US naval power will have an impact on the development of seaborne trade as well as oil and related industry.
Moore Stephens takes a glimpse into crystal ball
(Veregge Antje , Published on 24 April 2015)
What will the future of the shipping industry look like? Speakers at the Moore Stephens-BNP Paribas shipping forum 2015 that was
held during Singapore Maritime Week on 23 April, agreed that shipping volatility in the next five years will be driven by the rise of
China, the shale gas revolution in the USA and low oil prices.
However, various shipping sectors will be feel different impacts, as John D'Ancona, divisional director and senior dry cargo analyst at
Clarksons Asia Ltd pointed out. In his view the tanker sector will remain profitable due to low oil prices and a rising thirst for oil in
Asia.
The containership sector is likely to recover after five difficult years, he said, as consumption in the west and manufacturing will drive
container trades westwards. On top of that, D'Ancona believes that slow steaming techniques will mitigate the container supply
issue.
On the negative side, the slowing Chinese economy and the consequent reduced demand for iron ore and coal will present
challenges for the dry bulk sector. The offshore sector will be challenged due to its link to oil prices.
10
Shipping 2020 and Beyond
Press Report - Platts
Navig8 to start taking LR tanker deliveries in May;
upbeat on returns
(Sameer C. Mohindru, Published on 24 April 2015)
Navig8 Group, the world's largest shipping pool operator, will start taking deliveries of its long range oil product tankers from next month
and has a total tankers' order book worth $4.41 billion, a key company official said Thursday.
The pool operator also has an order book of 76 ships including 14 VLCCs, 30 LRs and 32 chemical carriers, Paul Stevens, the chief financial
officer of the group said at the Moore Stephens global shipping conference in Singapore.
Navig8 has invested in three companies for crude, oil product and chemical tankers and listed them on Norway OTC Exchange. Stevens
said the group has so far raised $1.24 billion in equity and $835 million in debt.
Seven of the chemical tankers are already delivered and deliveries of LRs will commence in May, he said. LRs have gotten a larger market
due to expansion and new state-of-the-art refineries coming up in the Middle East, aiming at long-haul exports and likely to operate at
high utilization rates.
The 400,000 b/d Satorp refinery at Jubail is fully operational since the third quarter of last year and LRs have taken an average 80% of the
monthly loadings, Stevens said.
LRs are again expected to dominate the loadings when Yasref's new 400,000 b/d Yanbu and ADNOC's newly expanded 840,000 b/d
Ruwais refineries -- that are already in operations -- become fully commissioned by the third quarter of 2015, he said.
The LR class product tankers, which are known as LR1 and LR2, can typically carry cargoes in the 55,000-65,000 mt and 75,000 - 90,000
mt range respectively.
"Jubail's operations was a major trigger in boosting product exports from the Middle East and wider rebound in earnings of LRs," he
added.
The Middle East is expected to add 1.6 million b/d of refining capacity during 2014-17. In the last six months the daily earnings of LR1s
and LR2s have more than doubled to $20,000-$25,000 and $25,000-$35,000 from $10,000-$15,000 each, he said.
Stevens said the Middle East also has the greatest advantage in petrochemical feedstock costs with gas prices as low as $1/MMBtu
though low-priced shale gas and ethane also makes the US a global competitor.
Demand for chemical tankers will increase as the Middle East's exports are expected to grow annually by 8 million mt over the next five
years.
He said a substantial increase in long haul demand and ton miles is expected as more crude barrels move from West to East because
crude production is growing more in the Atlantic Basin while refining capacity expands in Asia-Pacific.
As structural changes take place in crude, oil products, chemicals and LPG sectors, "early movers gain a competitive advantage."
The Group now manages 15 pools including seven for tankers, five for chemicals and three for dry bulk for a combined fleet of more than
300 ships, he said.
A shipping pool is a collection of similar types of vessels from different owners but placed under the control of a commercial entity.
The entity trades the vessels as a single, cohesive fleet and collects or "pools" the earnings, which are then distributed to the owners.
"The key to higher earnings is logistics optimization over freight rates, 41% of our fixtures last year were with top 15 customers such as
leading oil majors and global commodities traders," Stevens said.
He said ships are now being scrapped earlier, one of the reasons being regulatory changes and the average scrapping age for the tanker
fleet was around 23 years in 2014 compared with over 29 years a decade earlier.
11
Moore Stephens LLP, Singapore
Moore Stephens LLP, Singapore has had a long association with the shipping industry. Clients range from single vessel owners to
large multinational companies, and also include brokers, ship managers, pool operators and logistic providers. As a member firm
of Moore Stephens International Limited, with offices in many of the principal shipping locations across the globe, we are able
to provide a truly international service to our shipping clients.
www.moorestephens.com.sg
Contacts:
Moore Stephens LLP
Complete Corporate Services Pte Ltd
Chris Johnson - Partner
T +65 6329 2703
chrisjohnson@moorestephens.com.sg
Lim Peng Huat - Director
T +65 6329 2741
phlim@complete-corp.com.sg
Lao Mei Leng - Partner
T +65 6329 2706
laomeileng@moorestephens.com.sg
Muhammad Noor - Senior Manager
T +65 6329 2733
muhammadnoor@msconsult.com.sg
MAIN SPONSORS:
SPONSORS:
MEDIA PARTNER:
HELD IN CONJUNCTION WITH:
SUPPORTED BY:
ORGANISED BY:
POLLING SOLUTION WAS PROVIDED BY:
We believe the information contained herein to be correct at going to press, but we cannot accept any responsibility for any loss occasioned to any person as a result of action or refraining from
action as a result of any item herein. This document is not a substitute for professional advice. Printed and published by © Moore Stephens LLP, a member firm of Moore Stephens International
Limited, a worldwide association of independent firms. MSIL and its member firms are legally distinct and separate entities. Moore Stephens LLP (Unique Entity No : T08LL0862H) is an accounting
limited liability partnership registered in Singapore under the Limited Liability Partnerships Act (Chapter 163A).
Copyright 2015. All rights reserved.