As a key implementing body, the National Petroleum Reserve Center must determine how it will function, what steps should be taken first, what comes next, what actions are possible, how much capital is available, and who will lead the organization. These are critical issues that need to be addressed in this new phase of development.
Last year, the long-awaited National Petroleum Reserve Center was finally established at the end of the year. Meanwhile, the Zhenhai Petroleum Reserve Base, which had been in trial operation for nearly a year, was officially recognized by the state the very next day after the center’s formation. According to a press release from the National Development and Reform Commission, China’s oil reserve efforts have now entered a new stage.
However, there remains a significant gap. The "Regulations on the Management of State Petroleum Reserves," which had been highly anticipated last year, have not yet been officially released. Similarly, the draft Energy Law is still in the public consultation phase. While the institutions for oil reserves have been set up, the necessary rules and regulations remain pending.
On December 18, 2007, the State Council's Development and Reform Commission announced the establishment of the National Petroleum Reserve Center. According to the official press release, the new agency is responsible for constructing and managing the national oil reserve. It serves as the executive layer in China’s oil reserve management system, aiming to safeguard national economic security through oil reserves. Its responsibilities include overseeing the construction and management of the national oil reserve base, managing strategic petroleum reserves, collecting, storing, rotating, and utilizing them, as well as monitoring changes in domestic and international oil markets.
According to a reporter from *China News Weekly*, the institution is expected to operate as a bureau-level entity, possibly in the form of a company. An insider from the Development and Reform Commission mentioned that the oil reserve center will function similarly to the state grain reserve system. The Zhenhai Petroleum Reserve Base, currently operating as a limited company, has already been entrusted to Sinopec for its construction and management.
" It resembles the National Development Bank in the financial sector, but it is not profit-driven," said Han Xuegong, an oil industry expert. Cao Xiao, deputy chief engineer at Sinopec’s Institute of Economics and Technology, explained that unlike the former National Petroleum Reserve Office, which was a government department, the new center acts as an executive agency. Funding will come from government allocations, and the center can acquire reserve oil through various channels, not just from the three major state-owned oil companies.
The Zhenhai base is currently managed by Sinopec under the commission’s oversight, meaning the new center does not directly manage the base. Instead, it collaborates with Sinopec, PetroChina, and other enterprises for management. A Sinopec official noted, "They provided us with the funding."
Han Xuegong added, "Sinopec and PetroChina have the technology and equipment; there's no need to create another team." The timing of the announcement left many questioning why the center was established now, given that the idea had been discussed for years. Professor Cha Daojun from Peking University raised concerns about the potential risks of supply disruptions and whether the current reserves are sufficient.
According to reports, China and India attended a high-level meeting of the International Energy Agency (IEA) in Paris, where responses to energy crises were a key topic. Some experts believe the announcement could reflect compliance with IEA requirements. Since 1994, when China first engaged with the IEA, oil reserves have been a central issue.
While some analysts suggest that the announcement might influence global oil prices, Cao Xiao argued that it doesn’t necessarily mean China has started building reserves or that it would cause market fluctuations.
Despite the establishment of the center and the acceptance of the Zhenhai base, the National Development and Reform Commission has yet to announce the formal management regulations. Last year, the “Regulations on the Management of National Petroleum Reserves†were included in the State Council’s legislative plan, replacing the proposed “National Petroleum Reserve Law.†Research into policy frameworks has been ongoing, including a visit to EU countries to study their oil reserve systems, which are typically managed by private entities rather than the government.
In March 2007, Ma Kai, then director of the Development and Reform Commission, stated that China’s oil reserves include both government and corporate reserves. This view was reflected in the draft Energy Law, which outlines the role of the government in managing oil reserves and requires certain companies to maintain mandatory reserves.
While the Energy Law is still under review, it is expected to serve as the foundation for future oil reserve regulations. Before the center’s establishment, China lacked a true national reserve system, and corporate obligations were nonexistent. The three major oil companies only held commercial reserves.
Experts agree that the final structure of the oil reserve system depends on several factors, including the passage of the Energy Law, the framework of the State Assets Law, and potential institutional adjustments. However, some internal documents from the Development and Reform Commission are currently serving as temporary guidelines.
Internationally, China’s energy reserve policies are gaining attention. With oil consumption reaching around 350-360 million tons annually, while domestic production is only about 180 million tons, China relies heavily on imports. According to international standards, a country should maintain at least 90 days of oil reserves, but China is still far from achieving this goal. The initial reserve bases are not yet fully operational.
Thus, whether in terms of management systems or practical implementation, China’s oil reserve system is still in the process of being fully developed.
Japanese Car Toyato exhaust manifold assembly,Japanese Car Toyato exhaust manifold adapter,Japanese Car Toyatoexhaust manifold adapter kit
Ningbo Lingmai Machinery Manufacturing Co., Ltd. , https://www.lingmaimfg.com