China is taking steps to cope with soaring international oil prices, according to Wang Tao, senior vice president of the World Petroleum Congress (WPC) and chairman of the Chinese National Committee for the WPC. He was speaking at the WPC's First Youth Forum on Monday.
Crude prices have jumped more than US$10 in the past month. US light crude hit a new high on Monday at US$55.33 per barrel, for a gain of 68 percent since the start of the year. Brent crude futures in London matched an all-time high at US$50.40 per barrel, up 47 cents. Heating oil also set a new record on Monday at US$1.56 per gallon on the Nymex amid supply concerns.
Few analysts see any end in sight to the upward trend, and some are predicting prices touching the US$60 mark by the end of the year.
China is now the second largest crude oil importer in the world, with annual imports of over 100 million tons. To reduce the impact of soaring prices, the government is trying to diversify its energy structure.
Using new technologies to explore domestic oil reserves is the main method for China to meet rising demand, said Wang. The country has rich petroleum resources, with proven reserves accounting for less than 40 percent of the estimated total.
"Seeking more international cooperation in petroleum exploration and development has great potential for China," said Wang. So far, China has signed contracts with companies in 19 countries to explore oil fields.
Alternative energy is another way to reduce demand for oil, said Wang. Natural gas appears to be one solution, as China is only using 10 percent of its total reserves.
China is also rich in such environmentally friendly sources as solar energy, wind and hydropower. However, its application of these sources accounts for less than 1 percent of total energy use, said Wang.
China' oil imports jumped nearly 40 percent year-on-year in the first eight months of 2004, to 79.9 million tons. The Customs Bureau reported that the country processed a record 23.5 million tons, or 5.7 million barrels per day, in August.
(Xinhua News Agency, China.org.cn October 19, 2004)