BEIJING - China is capable of turning out
180 million tons of crude oil yearly in the next
20 years and enjoys a huge potential to developing
new domestic oil and gas resources, a senior
government official said here.
The
prediction is based on the third general survey of
national oil and gas resources by the National
Development and Reform Commission (NDRC) recently,
said Zhang Guobao, vice chairman of the NDRC, at a
press conference held by the State Council
Information Office. "The outcome of evaluation on
the oil and gas resources was better than former
data," said Zhang. According to Zhang, China has a
large potential to develop new oil and gas
sources, especially natural gas, which is still in
the initial development stage. "As long as an
all-out effort is made in
exploration, it is possible
to find new oil and gas resources in China, "
Zhang said.
In 2004, China's primary
energy production amounted to 1.845 billion tons
of coal equivalent (TCE) and total consumption of
energy reached 1.97 billion TCE. Some 94% of
China's energy consumption depends on its own
supply, with an external dependency rate standing
merely at 6%.
To safeguard energy supply,
China should adhere to the principle of relying on
domestic resources, said Zhang. He said China is
rich in renewable energy, which is still in the
initial development stage. According to Zhang,
China has set up a strategy to actively develop
its nuclear energy, and the installed capacity of
nuclear power will account for 4% of the country's
total installed capacity by 2020.
In terms
of building an oil reserve system, Zhang said
China will study alternative ways to gradually
increase its national oil reserve, rather than
buying crude oil from the world market to fill in
its reserve when the oil price remains high.
China's oil reserve scale should be determined by
its real conditions, Zhang added. Zhang also
underscored that reliance on domestic resources
does not mean rejecting international cooperation
in this regard. China's energy development on
foreign land will not pose a menace to other
countries, he said.
When importing crude
oil, China also exports other resources, so it is
unnecessary to make a fuss about China's oil
importation, he said. "It is not correct to
attribute the crude oil price hike in 2004 to the
growth of oil consumption in developing nations
such as China and India," Zhang argued. According
to him, multiple factors have contributed to the
price hike, such as the continuous turbulence in
some oil producing countries, under-capacity
production of crude oil, and particularly the
influx of a large amount of international floating
capital into the crude oil trading market. "Any
slight fluctuation could drive speculation on the
oil price," Zhang said.
China is the
second largest energy producer and energy consumer
in the world. In 2004, it imported 117 million
tons of crude oil, making up 6.31% of the world
trade volume. China also exported 80 million tons
of coal and its coke exports account for 56% of
the world trade.
Reserve filling
'financially risky' China will not buy more
crude oil while international prices remain so
high, Zhang said. While denying that China, a
relatively small importer of crude oil, is a
threat to the world on account of its increasing
energy consumption, Zhang did say the country will
research other methods of building its oil
reserves.
"We import only 6% of [our]
total consumption and we will not change the
policy of domestic dependence," Zhang said. "It
would be a great financial risk for China to buy
oil from the international market [now] for its
strategic reserve program, as the current global
oil price has been fluctuating at a high level."
Zhang, whose commission is the most powerful
cabinet department monitoring economic and social
development, said oil has already flowed into some
reserve facilities, but he didn't elaborate.
China's two major oil firms, Sinopec and
PetroChina, plant to build four reserve bases.
Reports have said that three of them are in East
China - Zhenhai and Daishan, near Zhoushan in Zhejiang province, and
Huangdao, near Qingdao in Shandong province; as
well as Xingang near Dalian in northeast China's
Liaoning province.
China is a relative newcomer to the idea
of setting up a strategic oil reserve. Developed
countries such as the US and Japan have had them
for years. As for the size of China's oil reserve,
Zhang said some people say it should equal 90 days
of consumption, and others say 120 days. "This
should be determined by China's real conditions."
The country doesn't need an oil reserve as
big as that of Japan, 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 inspiration of Chinese people to shake off
poverty and live a decent, well-off life," Zhang
said.
Furthermore, he said, the world
stands to gain 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.
But Zhang Jianyu, a visiting energy
scholar at Tsinghua University, contends that the
strategic reserve has little practical
significance. "I personally believe the strategic
oil reserve has more of a symbolic meaning," he
said. "It is China's leverage on international oil
prices."
At the press conference, Zhang
Guobao also revealed that:
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.
The Chinese Government has put on its work
agenda the collection of a fuel tax. The topic has
been long discussed in China, and various parties
have advocated such a tax.
China is expected to produce 180 million tons
of crude oil by the end of this year, becoming the
world's fifth largest producer. Last year, China
produced 175 million tons and imported 117 million
tons.
