Bright year ahead seen for O&M sector
Strong flow of new orders expected from solid capital investments globally
ROBUST capital investments in global exploration and production (E&P) projects in 2014 should keep new orders buzzing for Singapore's offshore and marine sector this year, although rising costs and competition could crimp margins.
Potentially higher labour, materials and equipment, utilities and premises costs are among the key factors that companies are keeping a watch on, and hope to keep in check, according to industry stalwarts and analysts. A learning curve for new vessel types could also be an initial dampener on margins.
Higher funding or borrowing costs could also be on the horizon as the US Federal Reserve initiates tapering of its bond buying programme from this month, particularly for those who did not lock in funding on still attractive terms offered last year. For the capital-intensive industry such as the offshore oil and gas businesses, this will be something to contend with.
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