Many countries in ASEAN oppose oil stockpile plan

Many countries in ASEAN oppose oil stockpile plan

M. Jegathesan, Agence France-Presse, Kuala Lumpur

Japan and South Korea are pressing Southeast Asian Nations to
establish a common oil stockpile to enhance energy security but
many ASEAN countries oppose the plan, officials said.

Southeast Asian officials said an oil stockpile would be an
expensive program which many Southeast Asian countries can ill-
afford with the funds better used for much needed development
programmes.

"Huge oil stockpile containers could become terror targets. It
poses a new dimension of security threat," one Southeast Asian
official told AFP Saturday.

The official, who spoke on condition of anonymity, said the
proposal was floated when top energy officials and experts from
Southeast Asian nations and China, Japan and South Korea met in
the Malaysian capital on June 9 and 10 to map out a common
strategy to bolster energy security.

"Japan wants an oil stockpile because it does not want to be
held to ransom, but there is a real danger that prices will be
controlled to the disadvantage of oil producing ASEAN countries,"
the official said.

The issue of an oil stockpile would be discussed when energy
ministers from the 10-member Association of Southeast Asian
Nations (ASEAN) and their counterparts from China, Japan and
South Korea -- who together make up a grouping known as ASEAN-
plus-three -- meet next month on Langkawi island in northern
Malaysia.

Ramon Navaratnam, former deputy secretary-general of the
Malaysian finance ministry said historically commodity stockpiles
had never been successful.

"There will be people who will try to sabotage the stockpile.
So it does not justify the establishment of an oil stockpile," he
told AFP Saturday.

Navaratnam criticized Japan and South Korea's push for a
stockpile, saying it was "a reflection of distress."

"It is a negative approach. It assumes that in Asia there
cannot be collective cooperation," he said.

Navaratnam, who is the director of a business think-tank unit,
the Asian Strategic Leadership Institute, said the safest
stockpile was below the ground.

"All we need is a reasonable pricing system within the context
of OPEC and a preference system of giving priority of supply to
oil importing countries in the region," he said.

The Southeast Asian official said ASEAN and its three partners
should make energy diversification and improving energy
efficiency a key priority of its energy security policy.

Malaysia for instance had suggested that ASEAN-plus-three
explore new petroleum resources, collaborate in practical and
cost effective energy technology and consult with oil and gas
producing countries in the Middle East.

The official said some 60 percent of oil imported by the 13
countries comes from the Middle East through the narrow Malacca
Straits where the risk of pirate attacks cannot be excluded.

"Hence, we cannot depend on just one energy source -- oil. We
need diversification of energy supply such as gas, hydro and
coal," the official said.

She said most of the ASEAN countries viewed energy security as
a long-term measure and agreed that an oil stockpile was not a
viable option.

"ASEAN wants a long term, stable energy diversification
policy," the official said.

Navaratnam said Japan should participate in exploration and
development of energy resources within ASEAN countries but
officials said Tokyo was reluctant to participate.

"Japan is not keen in exploration activities. But if they
participate, it will enhance development of other energy
resources such as coal, natural gas and other forms of renewable
energy," the official said.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, the Philippines, Singapore, Thailand and Vietnam.