2. Thank you for the kind reception. I am honoured to be among the prominent speakers invited to address you at the Ny-Ålesund Symposium.

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1 NY-ÅLESUND SYMPOSIUM 2013 SPEECH BY MR CHOO CHIAU BENG, CEO OF KEPPEL CORPORATION LIMITED NY-ÅLESUND, SVALBARD, 28 MAY 2013 SINGAPORE & THE ARCTIC TOWARD A SUSTAINABLE MARITIME FUTURE GREETINGS & INTRODUCTION 1. Mr Espen Barth Eide, Minister of Foreign Affairs, Norway; Mr Knut Ore, Chairman of the Boards of Kings Bay and the Ny-Ålesund Symposium; Excellencies, members of the academia, ladies and gentlemen, good morning. 2. Thank you for the kind reception. I am honoured to be among the prominent speakers invited to address you at the Ny-Ålesund Symposium. WIDENING THE ARCTIC CIRCLE 3. An ice-free North Pole will dramatically alter the environment and human access to its rich resources. The opening of the Arctic Sea Routes is expected to save oil tankers and container ships some 40% in distance, time and fuel. The Arctic s abundant natural resources will further support a host of commercial activities in shipping, oil and gas, tourism and more. 4. In spite of these prospects, human exploitation of this region is a double-edged sword. The Arctic is today one of the fastest warming places on the globe. The grave effects of climate change on its fragile environment, and on the rest of the world, are occurring more rapidly than previously thought. 5. An ancient Chinese saying goes, When the city gate catches fire, the fish in the moat suffer. Countries outside the Arctic Circle cannot afford to be bystanders. We need efforts from every country to work towards sustainable living and growth. 1

2 6. Despite the geographical distance, tropical Singapore where I come from is far from cold to developments in the Arctic. As a major financial centre and global maritime hub, Singapore takes a keen economic and political interest in international maritime policies and developments. The impact of climate change is also of great concern to this small island, not more than 20 metres above sea-level. 7. As a long time council member of the International Maritime Organisation (IMO), Singapore has been actively involved in protecting maritime navigation and the marine environment. It also participates in the IMO s Marine Environment Protection and Marine Safety committees, and gives input to the United Nations Convention on the Law of the Sea. 8. The recent acceptance of Singapore as a permanent observer on the Arctic Council is a breakthrough in its relationship with the Arctic countries. Together with the Council members and observers, we hope to capture opportunities and tackle challenges in making Arctic development sustainable for all. UNLEASHING POTENTIAL 9. The global thirst for energy is rising with rapid urbanisation in the emerging economies. Coupled with declining oil supplies, Brent crude price has been propped up to average levels of above US$100 a barrel for the last two years. 10. The potential rewards are driving oil companies to seek out fossil fuels in new offshore locations, which are often deeper and harsher. The Arctic is one such frontier, which is thought to hold as much as 20% of the world s undiscovered oil and gas resources. Roughly 85% of these latent reserves occur offshore at depths of up to 450 metres. 2

3 11. As massive pools of open water begin to emerge with the shrinking ice cap, there is a greater chance of mankind reaching these obscure hydrocarbons. Already, over 60 large oil and gas fields have been discovered in the region. 12. Having said these, Arctic oil production is a highly risky business. The commercial viability of offshore projects are affected by challenges such as: i. Severe climate conditions and the presence of ice; ii. The lack of infrastructure, pipelines and ports; iii. Inadequate Arctic technology and experience in offshore development; iv. A shortage of qualified personnel or crew; and v. A partial understanding of the environmental risks. 13. In the Arctic, significant ice loads, shallow water and harsh temperatures that can fall below -60 degrees Celsius, present huge challenges to rig and ship design. Moreover, preserving the Arctic s fragile environment while coping with possible disasters such as oil spills and accidents in remote locations can be very tedious. 14. Greater investments are needed to build clean and sustainable infrastructure, and the pool of Arctic technology and talents. Innovative or new technology for reliable ice-resistant vessels is required to support safe E&P and effective emergency response. These include winterised drilling rigs, pipelay and intervention vessels, floating platforms, subsea installations and icebreaking support vessels. 15. Although Singapore does not produce any oil and gas, it is among the world s top three oil export refining centres and a leading bunkering port. It commands about 70% share of the world's jack-up rig-building and floating production storage and offloading conversion markets. The country invests heavily in 3

4 marine and offshore engineering and environmental technology to meet the upstream sector s needs. [Slide 2] 16. The Keppel Group, through Keppel Offshore & Marine (Keppel O&M), is part of Singapore s vibrant maritime cluster. Keppel O&M is the world s leader in offshore rig design, repair and construction, ship repair and conversion and specialised shipbuilding. We have a global network of 20 yards across Asia Pacific, Gulf of Mexico, Latin America, the Caspian Sea, the Middle East and the North Sea. [Slide 3] 17. Over the years, Keppel O&M has accumulated knowledge and expertise in the extraction and production of oil and gas from marginal fields under extreme conditions. We have also partnered oil companies to develop robust solutions for the Arctic, focusing on rigs and ships that are safe and efficient to operate with minimal environmental impact. 18. Strong Heath, Safety and Environment practices are vital to offshore operations. In tailoring solutions for the Arctic, we draw from experience with other severe offshore frontiers such as the Gulf of Mexico and North Sea, where operations have been in place for many years. [Slides 4 to 10] Arctic Support Vessels 19. In 2008, Keppel constructed Asia s first two Arctic ice breakers for Russian oil company, LUKOIL, in compliance with the Russian Maritime Register of Shipping's standards. The two icebreakers, Varandey and Toboy, are capable of cutting through solid ice of 1.7 by 1.5 metres thick at a speed of 3 knots and operating in temperatures as low as -45 degrees Celsius. 4

5 20. These vessels are tailored to the "Clean Design" and "Zero Hazardous Discharge" standards to help lessen the impact of icebreaking operations. Both vessels are operating in the Barents Sea of Russia, paving the way for ships to sail through ice-blocked seas, and assisting with the directing, mooring and loading of tankers. These icebreakers are also equipped for fire fighting, emergency rescue operations, towing and supply work. 21. Over the years, we have also designed and built another four ice-class supply vessels and an ice-class Floating Storage Offloading vessel to support Lukoil s operations in the Caspian Sea. 22. To aid emergency response in the Arctic, Keppel O&M Technology Centre and the Norwegian University of Science and Technology jointly designed and patented an evacuation vehicle with accommodation facilities, which can propel on water, ice, snow and land. Winterised Drilling Rigs 23. Together with ConocoPhillips, we are in the process of developing an optimal drilling rig for the Arctic that is environmentally-friendly, cost effective and efficient for shallow water exploration. 24. This self-elevating mobile drilling unit features high-capacity dual drilling systems that can optimise workflow within the Arctic s tight operational window each year. The rig is equipped with leading-edge emissions control and waste treatment systems for zero hazardous discharge and strict compliance with nitrogen oxide emission standards. It is also has a subsea well control device to prevent oil spills. 5

6 25. Presently, Keppel s other modern jackup designs are being enhanced for transportation in ice conditions. With such capability, our jackup rigs will be able to traverse icy regions to arrive at various drilling locations worldwide and begin work earlier. 26. We have also built winterised features into our DSS TM 60HE harsh environment semisubmersible rig to support E&P activities situated further offshore. We are also in the midst of developing an Arctic Drillship to offer drillers and operators a wider range of viable deep water solutions. Collaborating for Sustainability 27. To conclude, the Arctic is no longer an icy outpost as countries warm up to business prospects in the region. The strong international presence at this Symposium is a heartening sign of growing rapport between the Arctic Circle and stakeholders worldwide. 28. There is more that we can do to address the challenges of Arctic development sustainably. We can draw good lessons from the BP Macondo and Exxon Valdez incidents to develop best offshore practices, tighter regulations, as well as more robust solutions and crisis response plans. 29. Above all, it takes ownership, and every stakeholder s commitment and support to launch the Arctic on its way to a safe and reliable future. Thank you. - END - 6