Malaysia suggests joint oil stockpile for energy security

Moch. N. Kurniawan and Novan Iman Santosa, The Jakarta Post, Nusa Dua, Bali

Malaysia has proposed the establishment of a joint oil stockpile among ASEAN countries to help ensure energy security in the region.

Malaysian Minister of Energy, Communication and Multimedia Datuk Amar Leo Moggie said here on Sunday that he had invited Indonesia to work together in initiating a feasibility study toward the creation of a joint crude oil stockpile.

"We have not yet made the detailed mechanism. We are just floating the idea to member countries," Amar told reporters on the sidelines of the two-day Indonesian International Oil, Gas and Energy (IIOGE) conference.

"The center is important to make sure that we have some element of comfort (on oil supply)."

Malaysia will become a net oil importer by 2008 while Indonesia has a longer lifespan, Amar said.

"But still we will become net oil importers soon."

Amar also said that he could not determine the size of the initial stockpile as it had to be analyzed first.

"I do not know the minimum requirement yet but the most important is to make the idea acceptable," he said.

Separately, Director General for Oil and Gas Rachmat Sudibyo said it was a good idea, but it needed a further discussion among other ASEAN countries.

"We (Indonesia) will carefully discuss it as ... we don't want the idea to create further burden for us," he told The Jakarta Post.

Both Malaysia and Indonesia are major oil producers in the region.

Indonesia produces about 1.2 million barrels of oil per day.

Amar also said his country was willing to host the ASEAN Council on Petroleum (ASCOPE) Gas Center, which will become the ASEAN gas center.

"Generally, the center will focus on formulating strategies and facilitating ASEAN gas development," he said.

In the short term, the gas center would nurture technical and commercial capability in the gas industry among ASCOPE members, he said.

It would also function as the focal point for a natural gas technology program and to provide updates and information sharing within the natural gas industry, Datuk went on.

In the long term, the center would enhance and promote ASEAN's technology capability advancement in the gas industry through effective gas-related techno-economic, research and development, education, skilled training and development, he said.

Malaysian state oil company Petronas has already set up a gas center in its research and development facilities in Bangi.

"We are offering this center to be ASEAN's center on all gas- related aspects both upstream and downstream.

"Both Malaysia and Indonesia have offered to host the center but it will be up to ASCOPE to decide," he said.

The 20th ASEAN Ministers of Energy Meeting (AMEM) has recommended ASCOPE set up an ASCOPE Gas Center that can develop into an independent ASEAN Gas Center.

The ASEAN ministers have also signed a memorandum of understanding to further develop a cross-border regulatory mechanism on the Trans ASEAN gas pipeline.