simple fact, for oil and gas companies, oil price must be in the range of $70 to $80. looking at the current price of $40+, it look impossible and rather stupid to invest in the oil and gas industry.
i give you an insider example.
Small shipbuilders happy build one or two vessels because for investing 7-9mio, they can sell the vessels for 12-18mio during good times, if they have ex-stock.
Now, now, now, one of our most reputable shipyard took the same approach and happily built 9-10 vessels, without anyone ordering them. These vessels are either completed or near completion and hardly any buyers comes along to view them. Think of the enormous financing-cost and massive labour-cost behind the scene.
The management fears that shipbuilding will exit singapore after this O&G crisis and they stand to lose their job. So what they happily do now is to sink deeper by sending the Indian and Bangladeshi labourer back but burning $$$ to retain the experienced supervisors (making them to area cleaning) because it will really be irreversible for our shipbuilding industry once we lose the experience Singaporean and Malaysian supervisors.
We could be looking at the largest loss of manufacturing GDP since the demise of our semi-conductor, precision plastic mould injection and harddisk industry.
