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.
"The international community should also respect China's right
to develop, and the aspirations of the Chinese people to shake off
poverty and live a decent, well-off life," Zhang said.
Furthermore, he said, the world stands to gain in business
opportunities from China's energy growth because it will drive the
development of its partners.
"It's really a win-win deal in energy cooperation between China
and countries such as Australia and Russia," he said.
At the press conference, Zhang also revealed that China boasts
"better-than-expected" oil reserves, and particularly good natural
gas reserves, according to a new survey conducted by his commission
and the Ministry
of Land and Resources.
China will not set up an energy ministry in the foreseeable
future, as the central government has already agreed to strengthen
the powers of the energy bureau under his commission. "The highest
leadership believes that it is rational for an economic and
development department to be in charge of energy issues in China,"
he said.
Energy Independence
Speaking at the China Business Summit 2005 held in Beijing on
September 10, Zhang pointed out that China is the world's second
largest energy consumer and also the second largest energy
producer. In 2004, China's primary resource independence rate
reached 94 percent, with only a 6 percent?dependence on
imports.
Last year, China produced 175 million tons of crude oil and
imported 120 million tons, a dependence rate of 40 percent.
Zhang added that China's crude oil import in 2004 only accounted
for 6 percent?to 7 percent?of the world's total crude oil
trade volume. In the same year, China exported 80 million tons of
coal accounting for 56 percent?of total international trade
volume.
(China Daily, chinanews,?September 14, 2005)