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.