Gulf states urged to ensure oil supplies

Gulf states urged to ensure oil supplies

ABU DHABI (AFP): Gulf states need to ensure stable oil
supplies for Japan and other Asian countries to grab a bigger
share of the fast-growing energy market in the continent, a
Japanese expert said on Saturday.

Asian oil consumers are already heavily reliant on crude from
the Middle East despite their abundant coal and hydrocarbon
resources and they could become more dependent because of the
rapid growth in their consumption, said Keiichi Yokobori,
director of the Institute of Energy Economics.

"Whether market opportunities for the Gulf oil companies can
be further expanded depends on several factors," he said in a
study presented at an international oil conference which opened
in Abu Dhabi on Saturday.

He said such factors included prospects for the continuous
expansion of Asian economies, growth patterns of the differing
economic sectors, such as transportation, competition with other
fuels such as oil from other regions, natural gas, nuclear-based
electricity, and coal prices.

"In particular, this means providing stable and sufficient oil
supplies to meet the Asian customers' requirements at affordable
prices," he said.

"This includes the provision of a safe and secure logistical
infrastructure to the distant customer and the reciprocal
participation in both upstream and downstream operations to
secure mutual business interests.

"It also includes development of a transparent pricing scheme,
greater exchange of goods, services and technologies in a broader
context and appropriate actions to safeguard the environment...
coupled with the energy deregulations occurring in Asian markets,
exercising such options could enhance the access of Gulf oil to
the Asian market."

Japan, one of the biggest oil consumers in the world, is the
main importer of Gulf crude, receiving from the region nearly 70
percent of its total oil needs. The level is set to increase in
the coming years as its consumption is steadily growing and the
Gulf controls nearly 60 percent of the world's oil.

As other supply sources are dwindling because of their
relatively small reserves, Japan has sought stable, long-term
crude supplies from Gulf Arab states. In turn, they have asked
for Japan's help in acquiring technology needed to ease their
reliance on volatile oil export earnings.

Japan alone imports nearly 2.8 million barrels per day (bpd)
of oil from the Gulf Cooperation Council (GCC) states -- Saudi
Arabia, Kuwait, Qatar, Bahrain, Oman and the United Arab Emirates
(UAE). Such supplies accounts for around one fifth of the GCC's
total crude exports.

South Korea is the second biggest Asian consumer of Gulf oil,
followed by Thailand, Malaysia, Singapore and Hong Kong. China,
the most populous nation, is increasingly becoming reliant on
crude imports from the Middle East as its production could no
longer match its fast-growing consumption.

Keiichi, also president of the Asia Pacific Energy Research
Center, said energy consumption in East Asia would continue to
grow rapidly.

"Because of higher economic growth and the larger population
size, the energy demand in Asia, in particular in East Asia,
continues to grow at faster rates than that of other regions ...
this situation is expected to continue into the next century,"
he said.

"The growing demand will eventually increase the region's
dependence on external sources, in particular the Gulf area. The
recent transition of China from oil exporter to a net importer is
symptomatic in this regard."