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Top refiner sets wheels in motion for oil stockpile

By Wang Yu (China Daily)
Updated: 2007-05-19 16:04
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Asia's top refiner is busy building up China's first commercial oil reserve company as the country focuses more on securing vitalenergysupplies.

Sinopecspokesman Huang Wensheng revealed to China Daily exclusively on Friday that the refiner had set up its own corporate oil reserves, spreading under subsidiaries of the group company.

"A unified administration can trim the operation cost and manage the reserves in an efficient and integrated approach," he said.

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Huang did not elaborate on details when the firm will be established and how large the reserve will be under its operation. But he stressed that Sinopec's tanks throughout China can accommodate enough commercial reserves.

A senior press official from Sinopec Group confirmed the move, saying Sinopec had realized the necessity of streamlining the administration and operation of corporate oil reserves.

"It is an internationally recognized tendency for a country to build up oil reserves at both State and corporate levels," the press official said.

"That is why we are taking the lead to set up the company taking care of our commercial reserves. It is easier and more effective for an independent company to operate and manage those reserves."

China is investigating every means to secure fuel supply, as demand increases.

In addition to State strategic oil reserves, China is pinning hopes on corporate reserves to leverage demand and supply. The proposed first Energy Law of the country will regulate the necessity of setting commercial oil reserves at corporate level, according to key drafters.

The law under drafting may require State-owned large and medium-sized oil companies to establish corporate reserves to maintain effective oil supplies, Wu Zhonghu, one of the core law drafters, said.

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