Singapore has come a long way from its early status as a storage and transshipment centre for kerosene in the colonial Far East. The country now encompasses a gamut of petroleum-related activities, from rigbuilding and rig-repair, the manufacture of oilfield equipment, and the provision of a collective of technical and logistics support services for the offshore hydrocarbons industry on the upstream side, to refining, crude and product trading, storage, marketing, and distribution downstream.

The heart of the industry lies with the country's refineries. Beginning with a small crude distillation unit constructed in 1961, the refining industry was well established in Singapore by the early 1970s. With the recent spate of large investments in sophisticated secondary processing facilities, the refining sector is in the process of substantial upgrading and rationalization. Defying the conventional wisdom of a few years ago which predicted the eventual demise of entrepot refining in Singapore in the face of severe external challenges, the refiners have successfully made the transition to a new era of optimism.

As argued in Chapter 4, several factors considered collectively suggest that the outlook for entrepot refining in Singapore is more positive today than it was just two to five years ago. More generally, the Asia-Pacific region offers prospects for rapid growth in the demand for refined products. Indeed, the recent expansion in the demand for light and middle distillates among the Asian NICs such as Taiwan and South Korea as well as the next-tier NICs such as Thailand has been spectacular. This veritable explosion in regional demand is expected to lead to a worsening balance between demand and supply of specific petroleum products as regional refinery yields fail to match the rapidly evolving product demand configurations. The changing structure of product demand in favour of lighter pro- ducts will place Singapore's upgraded refineries in a better position to continue to competitively fulfil the role of a swing refining centre, balancing out the disparities between supply and demand for specific products in the region.