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Economic Review: China Capable of Maintaining Annual Oil Output of 180 Million Tons in 20 Years

Posted on: Wednesday, 14 September 2005, 09:00 CDT

Economic Review: China capable of maintaining annual oil output of 180 million tons in 20 years

by Chen Gang, Chen Xingxing

BEIJING, Sept. 13 (Xinhua) -- China, capable of turning out 180 million tons of crude oil yearly in the next 20 years, enjoys a huge potential in developing new oil and gas resources, a senior government official said here Tuesday.

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 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 percent of China's energy consumption depends on its own supply, with an external dependency rate standing merely at 6 percent.

To safeguard energy supply, China should adhere to the principle of relying on domestic resources, said Zhang Guobao.

Zhang 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 its installed capacity of nuclear power will account for 4 percent of the country's total installed capacity by the year 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, Chen 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 said.

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 slightest fluctuation could drive speculations 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 percent of the world trade volume. China also exported 80 million tons of coal and its coke export accounts for 56 percent of the world trade.

Source: Xinhua News Agency - CEIS

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