No Oil Import Plan to Fill Reserve: Chinese Official

[HenryTo]

China was expected to start filling up its own "Strategic Petroleum Reserves" sometime last month or this month. Given the following development, crude oil prices should continue to head down in the coming months:
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Tuesday September 13, 11:52 AM
No Oil Import Plan to Fill Reserve: Chinese Official

BEIJING, Sept 13 Asia Pulse - China will not import crude oil to fill its reserve when the oil price remains high, a senior government official said here Tuesday.

"It would be a great financial risk for China to buy oil at the international market for its strategic reserve program as the current global oil price has been fluctuating at a high level," said Zhang Guobao, deputy director the State Development and Reform Commission.

China will study other ways to gradually increase the state oil reserve, said Zhang at a press conference of the Information Office of the State Council, the country's cabinet.

China has started to formulate plans for the state oil reserve and construction of some oil reserve facilities are under way.

As for the scale of China's oil reserve, Zhang said some people suggest it should be equivalent to the amount of 90 days of oil consumption, while others hold it should be equivalent to that of a 120-day consumption.

"This (scale) should be determined according to China's real conditions," Zhang said.

It's not necessary for China to build up a state oil reserve asbig as that of Japan which has to import every drop of oil from the world market, while China can satisfy most of the domestic demand with the crude produced at home, he added.

According to him, China is expected to produce 180 million tons of crude oil in 2005, compared with 175 million tons last year, when the country imported 117 million tons.

China's oil import accounted for 6.31 per cent of the world total, 23 per cent of that of the United States and 56 per cent of that of Japan.