Top Biz News

Top refiner sets wheels in motion for oil stockpile

By Wang Yu (China Daily)
Updated: 2007-05-19 16:04

Sinopec, as Asia's largest refiner, imported 70 percent of crude it needed for oil refining business last year. Corporate reserves will play an extremely important role for the firm to fend off additional risks brought by fluctuations in global oil prices, Han Xuegong, a senior consultant withChina National Petroleum Corporation (CNPC), said.

A source from PetroChina, CNPC's listed arm, revealed to China Daily that his company is also working on corporate reserves, but no details are available at this time.

ShanghaiSecurities News reported on Friday that Sinochem Corporation had purchased 250,000 tons of crude from the Middle East and will store them in Daishan as corporate reserves this month. Sinochem refused to make any comment on the report on Friday.

The government can give some incentives to encourage large companies setting corporate reserves. But it is also oil companies' responsibility to leverage oil supply and demand - a common practice in market-oriented countries, according to Jiang Xinmin, an analyst with the Energy Research Institute under theNational Development and Reform Commission, China's top economic planner.

The Chinese government approved four national strategic oil reserve sites in 2004. They are Ningbo and Daishan ofZhejiangProvince, Huangdao of East China'sShandongProvince and Dalian inLiaoningProvince.

The NDRC announced that the country's first strategic oil reserve base in Ningbo had been put into operation. Insiders revealed that the Daishan site has also been in operation.

(China Daily 05/19/2007 page3)