Vietnam to Host ASEAN+3 Oil Forums

Vietnam to Host ASEAN+3 Oil Forums

Ten members of the Association of Southeast Asian Nations (ASEAN) - Vietnam, Thailand, Singapore, Malaysia, Brunei, Cambodia, Indonesia, Laos, Myanmar and the Philippines - plus Japan, China and South Korea, or ASEAN+3, will discus an Asian oil stockpiling programme and oil market in Vietnam’s Hanoi capital on March 14, 2005, according to an official from the Vietnamese Industry Ministry, who declined to be named.

"The 3^rd ASEAN+3 Oil Stockpiling Forum and the 2^nd ASEAN+3 Oil Market Forum is slated for March 14. Senior officials from the 13 countries will focus their discussions on the establishment of a common oil stockpiling program and the development of an Asian oil market in sustainable way," the official revealed.

ASEAN+3 members pay special attention to oil markets, since several of them have great demand for oil and petroleum products, but they heavily depend on supplies from the Middle East. To cope with unexpected hikes in world oil prices, they should contribute specific amounts of oil, mainly crude, to the future program, and then develop a proper oil market for it.

However, there are still considerable differences among ASEAN+3 members with regard to the endowment of oil resources, supply and demand situations as well as the status of economic development. Disparities also exist in the economic capability in dealing with the cost burden for setting up the future common program.

During the 2^nd ASEAN+3 Oil Market Forum, the delegates may discuss many hot issues such as the strengthening of oil market functions, enhancements of dialogues between ASEAN+3 and oil producers in the Middle East, improvements in exploration and production activities in ASEAN+3, expansion in oil stockpiling, development of alternative supply sources outside the Middle East, the official said.

In the 1^st ASEAN + 3 Oil Market Forum held in November 2003 in Thailand, representatives from ASEAN+3 agreed that the greatest matter of concern in the forum was the “Asian Premium” on the energy price. They jointly understood that: the Asian Premium issue represents a matter of economic concern that is common to all Asia; the Premium has been continuously observed since early 1990s; Asian countries are paying the price of approximately one US dollar higher than their European or North American counterparts for a barrel of oil; and such price differentials stems from the lack of diversity in supply sources for Asia, which is highly dependent on Middle Eastern suppliers with insufficient flexibility.

In a meeting in 2002, ASEAN+3 identified five priority areas for Asian energy cooperation, namely oil stockpiling, energy security network, studies on the oil market, promotion of natural gas usage, and renewable energy. Subsequently, forums related to the areas have been set up, including the Oil Stockpiling Forum, the Oil Market Forum, the Energy Security Forum, and the Natural Gas Forum.

• Dong Phong