Member countries of the Association of Southeast Asian Nations

Member countries of the Association of Southeast Asian Nations (ASEAN) don't need a common oil stockpiling program because of the 1986 Asean Petroleum Security Agreement (APSA), Mohd Hassan Merican, chief executive officer of Malaysia's Petronas, said on Thursday.

Earlier this year, instability in the Middle East and the U.S.-led war in Iraq prompted calls for establishing a common oil stockpile among ASEAN countries.

"I'm not saying that it isn't necessary to have a common stockpile, but I'm saying there's no need yet for the stockpiling," he said on the sidelines of an energy conference in Langkawi, Malaysia.

Based on the APSA, the oil-producing members - Brunei, Indonesia and Malaysia - are expected to back up other members if an oil shortage occurs, said Mohd Hassan.

"APSA has set up a mechanism (for ASEAN members) to support one another" if there is an oil shortage, he said.

Mohd Hassan also pointed out the high cost of keeping a 90-day inventory.

"I know Japan and South Korea have a high stockpile, but to put 90 days of crude requirements in storage is costly," he said. Mohd Hassan said the issue of funding the stockpiling has to be addressed.

"Malaysia is a developing country. We've better use of our resources for development of our country," he said.

The mandated stockpiling in the APSA is "sufficient" for the time being, he said. -- Dow Jones