Sinopec to double oil stocks as part of China strategic reserve plan

BEIJING (AFX-ASIA) - China Petroleum and Chemical Corp said it is to double its oil stockpile from the current 5-6 mln tonnes over the next 2-3 years, to help fend off oil price hikes and help China build up a strategic national oil reserve, the China Daily quoted vice chairman Zhang Jiaren as saying. The newspaper said Sinopec's plan is being seen as the nation's first step in starting such a reserve. Zhang, a deputy to the Ninth National People's Congress, which closed yesterday, said the central government is discussing details of the oil reserve framework, but added that "the national reserve will not be used to intervene in the oil market unless an emergency occurs." Wang Tao, a member of the Standing Committee of the NPC, was quoted as saying that recently discovered oil fields should be conserved as part of the national stockpile. The government should compensate the oil companies for their losses in preserving these fields through subsidies, he said. The China Daily said the national stockpile, listed in the 10th Five Year Plan which was approved by the NPC yesterday, is seen as economically and politically crucial for the country, a net oil importer since 1993. Wang said now was the right time to set up a reserve as supply exceeds demand on international markets and China has enough foreign currency to pay for its oil imports. Wang said the national oil reserve, which he estimates would take about 10 years to set up, should be big enough to keep the country going for at least three months if imports were halted. "That means 15 mln tonnes should be preserved as a national reserve and the amount should grow as imports rise," he added.

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