China to Build up Strategic Oil Reserves

[paineinthearse]

http://www.scoop.co.nz/stories/WO0509/S00257.htm

China to Build up Strategic Oil Reserves
Wednesday, 14 September 2005, 9:38 pm
Press Release: Govt. of China
Nation to Build up Strategic Oil Reserves

China will not buy more crude oil while international prices remain so high, a senior cabinet official said yesterday. While denying that China, a relatively small importer of crude oil, is a threat to world supplies and reserves on account of its increasing levels of energy consumption, Zhang Guobao, vice-minister of the National Development and Reform Commission, said the country will research other methods of building its oil reserves.

"We import only 6 percent of our total consumption and we will not change the policy of domestic dependence," Zhang said at a press conference organized by the Information Office of the State Council. It would be a great financial risk for China to buy oil from the international market for its strategic reserve program, as current global oil prices have been fluctuating."

Zhang, whose commission is the most powerful cabinet department monitoring economic and social development, said oil has already been siphoned into reserve facilities, but he didn't elaborate on the issue. Zhang added that China's two major oil firms, Sinopec and PetroChina, will build four reserve bases. Reports have said that three of them are in east China's Zhenhai and Daishan, Huangdao near Qingdao in Shandong Province, and Xingang near Dalian in Liaoning Province.

China is a relative newcomer to the concept of strategic oil reserves. Developed countries such as the United States and Japan have had them for years. As for the size of China's oil reserve, Zhang said: "This should be determined by China's real conditions." The country doesn't need an oil reserve as big as Japan's, which has to import all of its oil, Zhang added. China can satisfy most of its demand with the crude produced at home. Because of China's lack of dependence on world crude, it is quite unnecessary for other countries to overreact to the growth of its energy consumption, he said.

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[phantom power]

1. Why doesn't anybody ever call America a "threat to world oil supplies?"

Sure, China is using oil, but so does every other country, especially other industrialized countries.