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Singapore Petroleum
Petroleum and petrochemicals were another base of
Singapore's
industrial and economic life. In the late 1980s, Singapore
was the
world's third largest oil-trading center and also the
third largest
center for petroleum refining. It was the second largest
builder of
drilling rigs, and its facilities for repairing and
maintaining
rigs and tankers were the most competitive in East Asia.
When oil prices began eroding in 1981 and collapsing
toward the
end of 1985, Singapore felt both negative and positive
consequences. The collapse of oil prices dealt a severe
blow to oil
exploration. The impact was felt widely and immediately in
everything from reduced orders for rig construction to
lowered
occupancy of luxury apartments as foreign petroleum
workers
returned home. With both of its immediate neighbors,
Indonesia and
Malaysia, heavily dependent on oil and gas exports for
revenue,
Singapore had a resulting loss of trade in both goods and
services.
Singapore benefited, however, from the availability of
cheaper
energy, which in 1986 amounted to a savings of about S$2.5
billion
(US$1.12 billion). Furthermore, Singaporean refineries
invested in
the equipment and technology necessary to enable them to
refine a
wide variety of crude oils and obtain a greater proportion
of highvalued products from the refining process. Petroleum
refining alone
made up 28 percent of Singapore's manufacturing output in
1985,
although by 1988 it had dropped by half as a result of a
decline in
petroleum production and growth in other industries.
Singapore also
benefited indirectly when large oil importers such as
Japan and the
United States obtained higher real incomes from lower oil
prices,
enabling them to increase their imports from Singapore and
other
countries.
Data as of December 1989
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