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Chinese oil companies to set up their own reserves
AFP
BEIJING
Petroleumworld.com 02 15 06China is drafting an Energy Law requiring state-owned energy companies to set up corporate oil reserves to supplement national reserves currently being built up, state media reported Thursday.
"We are seriously weighing the option of constituting national oil reserves, both at the strategic and commercial level," Wu Zhonghu, one of the core law drafters, was quoted by the China Daily as saying.
He added companies that build reserves may expect state subsidies to cover operating and management expenses and said he hoped the State Council would review the draft law by the end of this year.
The law, which aims at coping with emergencies and maintaining effective fuel supply, is being proposed as China's booming economy has led to increasing demand for energy and production materials.
The country imported 138.8 million tonnes of crude oil in 2006, up 16.9 percent from 2005, the newspaper said.
Industry observers have warned China would have to import more than 50 percent of crude oil supply "in just one or two years," it added.
China has already approved four national strategic oil reserve sites in the east and northeast part of the country while a base in Ningbo in the eastern province of Zhejing has just been put into operation recently, the report said.
AFP 15 0253 GMT 02 07
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