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China to build strategic oil reserves

China will build strategic oil reserves as insurance against supply disruption.

india Updated: Nov 25, 2005 12:02 IST

China, the world's second largest oil consumer, will build strategic oil reserves as insurance against supply disruption while initiating dialogue with other countries for stable energy supply at affordable prices, the country's envoy to India said on Friday.

"To properly respond to emergence and prevent oil supply risks, China will gradually build up the oil reserve system and emergency response mechanism," Chinese Ambassador to India Sun Yuxi said the Asian Oil Ministers Round Table in New Delhi.

India, which is 73 per cent import dependant to meet its oil needs, also has plans to build strategic crude oil reserves to meet country's requirement of 15-days during emergencies.

The Asia's largest oil consumer, which plans to strengthen reforms in electricity, coal, oil and gas, would also attach great importance to security in coal production and construction of a reliable energy transportation system, he said.

"Following the principle of equality and mutual benefit win-win enterprise operation, government coordination, vast cooperation, diversified development, sincere treatment and enhanced communication, Chinese government is willing to strengthen dialogue, cooperation and exchange with other countries in the world and make its own contribution to the stable energy supply," he said.

"Large fluctuation on oil prices was unfavourable for both oil producing and consuming countries, we need both sides to join hand in hand and tackle the energy challenge together, hence, maintain the world oil price at a reasonable level," he said.

China will enhance the exploration and development of coal, oil and natural gas; optimize energy mix, raise efficiency of energy utilization and attach importance to environmental protection.

"One key point of the reform is to introduce a competition mechanism and nurture our companies into the main body of development and investment in energy industry. In addition, Chinese government welcomes foreign companies to invest on energy projects in diversified forms," the Chinese Ambassador said.

First Published: Nov 25, 2005 12:02 IST