Cooperation needed on Asian oil demand

Cooperation needed on Asian oil demand

BEIJING (Reuter): Explosive oil demand in Asia, particularly
in China, must be met by cross-border cooperation and
partnerships if the region is to avoid confrontation, former OPEC
Secretary-General Subroto said yesterday.

"The key word in meeting the very serious energy issues in
Asia, and particularly in China, is cooperation and partnership,
not confrontation," Indonesia's Subroto, chairman of the
Foundation of Indonesian Institute for Energy Economics, told a
China petroleum conference.

"International and multilateral energy cooperation with China
should not only be limited to increasing production, but should
also include energy technology and conservation," he said.

Oil consumption in the Asia-Pacific had overtaken western
Europe and by 1998, standing at 21.3 million barrels per day
(bpd), it would exceed North America's 21.2 million bpd, Subroto
said, adding that Asia-Pacific's consumption figure would rise to
23.5 million bpd by 2000.

China's refined oil products consumption alone would take up
4.2 million bpd in 2000 and 6.8 million bpd in 2010, he said.

Crude oil production in Asia was unlikely to see a significant
increase, rising to only 7.0 million to 7.2 million bpd in 2000
from the current 6.76 million bpd, making the region a huge
importer, Subroto said.

Asia's future oil deficit has intensified the search for new
oil sources and the Spratly Islands cluster is viewed as a
potential flashpoint.

The Spratlys, a group of possibly oil-rich isles, reefs and
shoals in South China Sea, are claimed wholly or in part by
China, the Philippines, Vietnam, Taiwan, Malaysia and Brunei.

Disputes between China, Vietnam and the Philippines have
flared over the islands in recent months. In May, foreign
ministers of China and the Philippines agreed to settle their
disputes peacefully.

Speaking to Reuters later, Subroto said disputes over the
Spratlys were a matter of concern, but added: "China is wise to
agree to settle the issue with ASEAN (Association of Southeast
Asian Nations) on a multilateral basis, not bilaterally."

Subroto told the conference that China's dependency on oil
imports, forecast to rise to 47 percent of its consumption from
just five percent in 1993, would bring about deeper alliances
between China and the members of the Organization of Petroleum
Exporting Countries (OPEC), particularly the Middle East.

"The most dynamic element will be the new linkage between
China and the Persian Gulf, particularly with Iran and very
likely, also with Iraq," Subroto said.

But he said the current low price of oil could impede new
discoveries and investment in infrastructure like deep-sea ports
and pipelines.

"While the abundance of potential energy resources is not in
dispute, the present combination of high energy demand and low
energy prices may, however, not be sustainable," he said.