Few S'pore O&M firms gain as Indonesia increases oil production
Cabotage law, which protects jobs in the sector for Indonesians, to include shipyards
Singapore
INDONESIA will be increasing its oil production over the next few years but only a few offshore marine players here can benefit from this because of an Indonesian rule that protects jobs in the industry for Indonesians.
While rig builders here could stand to gain in the near term, it appears that the cabotage law in Indonesia is being expanded to include Indonesian shipyards as well, boding well for rig builders with Indonesian-based yards.
In 2008, Indonesia implemented cabotage rules requiring all work in the oil & gas sector to be done only by Indonesian-flagged vessels. Phased in gradually from 2013, the cabotage law prevents Singapore-flagged vessels or those owned by Singapore-listed companies from benefiting from this increase in demand as Indonesia aims to step up its oil production to reverse years of production…
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