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Beginner’s Guide on Starting an Oil and Gas Consultancy Business in Singapore
Singapore is known as Asia’s oil hub despite not having local hydrocarbon reserves. This attribute arises from the city-state’s world-class refining, manufacturing, and production capabilities, making it a global energy hub. Oil and gas – or O&G – is a competitive market, and the demand for good consultants is high. Starting an oil and gas consultancy business can net plenty of opportunities as the industry itself is massive.
Venturing into the world of O&G consultancy can be a rewarding and lucrative experience for any entrepreneur. Dynamic consultants can turn the tide for any business by unlocking new talent, implementing fundamental approaches or technologies, etc. O&G companies find it expedient to hire reliable consultants to provide agility and intellectual capital to their business strategies.
If you’re keen to venture into this specialised but highly profitable industry, then do read on. In this essential guide, 3E Accounting provides insights on all you need to know before you get started.
What is an Oil and Gas Consultancy Business?
Consultancy is an umbrella term for a business that offers advice and solutions for companies needing them. Consultancy business is usually industry-specific and requires the competencies of specialists to arrive at a workable solution. For example, a company unsure of its financial risks can hire financial consultants to provide financial planning solutions.
The O&G market diverges into upstream activities, midstream logistics, and downstream products. This includes exploration and drilling, storage and transportation, refining and sales, etc. Energy companies actively seek out O&G consultants to enhance and maximise everything from operations to talent acquisition.
In a nutshell, an O&G consultancy business provides multi-spectrum solutions for energy companies. These can include financial, operational or technology solutions, human resource and public relations, legal and regulatory consulting, etc. Specialist consultancy work can include geological analysis, infrastructure and engineering rollouts, drilling programmes and reservoir studies, etc.
Why Start an Oil and Gas Consultancy Business in Singapore?
The energy trade is on the rise with better utilisation of new sources and strategies. As an industry that runs the global economy, the O&G sector also creates billions of jobs and revenue streams. The global O&G sector is one of the top ten rising industries of 2021, despite the economic slowdown. This sector is forecast to grow at 25.5% CAGR (compound annual growth rate) to USD5870.13 billion in 2021.
Enterprise Singapore statistics indicate that 2021 residual fuel stocks were 5% higher than the previous year. Singapore has numerous O&G companies that use it as a geographical hub to do business.
The Gas Network Code also governs and promotes a competitive business environment for energy companies. According to the Energy Market Authority (EMA), 95% of Singapore’s electricity usage comes from natural gas. Further, Singapore has several fully operational LNG (liquid natural gas) terminals and regasification facilities. It also has the world’s largest bunkering port, while the two largest oil rig builders call Singapore home.
Multi-billion-dollar investment projects and solid Government support are expanding the O&G landscape in Singapore. A stable business environment and an international reputation for world-class infrastructure and innovation are boosting this growth. All this translates to good news for anyone starting an oil and gas consultancy business in Singapore.
What Does an Oil and Gas Consultancy Business Need?
As with any business venture, the first step is to write up a business plan. A consultancy business can be quite broad in its scope, and it helps to assess your competencies. Consultants in the O&G sector are usually O&G professionals and have already built up their credentials. If this is not you, all is not lost – you can always build up a network of industry-specific specialists.
The versatility of a consultancy business necessitates the need for identifying your scope of business. Check out the competition, industry trends and demands, and where you can position your business in the landscape. This allows you to niche down and become an expert of sorts, building up reputable credentials. For example, you may specialise in O&G workforce procurement, building up a database of industry-specific talents.
With solid financial planning and risk assessment strategies, your business plan will help you make crucial decisions. For example, you may want to start your consultancy as a home-based business and work your way up. The Singapore Home Office Scheme facilitates such options, laying out guidelines to stay compliant.
It will also help you decide on the best company structure for your business as registration is legally required. Popular options include sole proprietorship or partnership, limited partnership or limited liability partnership, and limited company structures. Each has its benefits and drawbacks, so it’s best to do some due diligence. 3E Accounting’s guide to company registration in Singapore is a great place to start your knowledge quest.
Requirements to Start an Oil and Gas Consultancy Business in Singapore
Singapore requires all businesses to be legally registered, and the process is straightforward. If you choose to do it yourself, you will need a Singpass account to log in to BizFile. This is the Singapore Accounting and Corporate Regulatory Authority’s (ACRA) company registration platform. Alternatively, you can engage Singapore company incorporation firms such as 3E Accounting for a seamless and customisable incorporation experience.
The registration and incorporation process follows a framework that includes the following:
- Registering a suitable company name with ACRA by following its ‘naming rules’.
- Selecting the most viable company structure for your business needs.
- Preparing and submitting incorporation documentation such as the Articles and Memorandum of Association, a business address, information on directors and shareholders, etc.
- Filling up on the online registration form and paying the appropriate fees.
Upon approval, you’ll need to look into registering for taxes with the Inland Revenue Authority of Singapore (IRAS). You will also need to open a corporate bank account and invest in some essential business liability insurance. Then comes the most crucial step – getting the necessary permits and approvals to stay compliant.
Contact a corporate service provider in Singapore to make sure you fulfil all the compliance requirements.
Approvals for an Oil and Gas Consultancy Business in Singapore
The O&G industry is not only highly competitive but is also tightly regulated by the relevant authorities. Singapore does not generally require businesses to be licenced to do business as it all depends on the sector. Depending on the nature of your consultancy, your first point of reference will be licencing from the EMA. This includes approvals to work on gas installations, to be involved in O&G logistics, etc.
Permits from the Singapore Civil Defence Force (SCDF) are applicable if you plan to transport O&G materials. It would also be prudent to check out any approvals needed by the National Environment Agency (NEA). Some activities, such as waste management, pollution control, etc., may require permits from the agency. The Ministry of Manpower (MOM) has also revised its Employment Agencies Licence condition, which may impact your consultancy business.
Further, if you’re providing auditing services for the O&G sector, a whole new set of approvals come into play. Hence, licencing and permits can turn out to be a bit tricky for a consultancy business. You should engage professional help to ensure your business stays compliant.
How to Grow Your Oil and Gas Consultancy Business
It all comes down to solid networking in this industry, so creating a name for yourself is a must. You need to form lasting relationships and establish a reliable reputation for your business. Attend trade shows and events, host networking get-togethers, and always ask for client referrals. This will complement your company’s website and strong social media presence, driving your marketing and branding footprint.
You may also want to register with Singapore’s Business Advisors and Consultants Council (SBACC). The Council oversees Practising Management Consultants and offers certification programmes, which can help you establish a more professional portfolio. Further, some clients prefer certified consultants as it makes them eligible for specific grants and incentives. Education is also a great way to keep up with market trends and the latest technology and innovation.
Another idea to drum up business is to diversify and produce reports and studies for the O&G industry. Energy companies are always looking for statistics, analytics, etc. You can turn a tidy profit from these. It’ll also position your company as a familiar name in the circuit, thereby leading to more consultancy opportunities.
There’s no disputing that the O&G industry is one of the pillars of Singapore’s economy. With its progressive and innovative business strategies, Singapore is a top three export refining centre globally. As global energy demands rise, this island nation is in an ideal position to soar with it. Starting an oil and gas consultancy business is an excellent idea for the intrepid entrepreneur.
3E Accounting, the go-to corporate service provider in Singapore, can help you start your journey in this field. Our team of global professionals are on hand with customisable and comprehensive solutions for all your business needs. Contact 3E Accounting today to explore 21st-century solutions for modern business requirements.