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Yukos called to honour oil commitments
By Hu Xiao (China Daily)
Updated: 2004-09-22 01:00

China hopes Russian oil giant Yukos will honour its commitments to provide oil to Chinese companies, said Chinese Foreign Ministry.

"We hope Yukos can honour its agreement with Chinese companies and will deliver on its promise to export oil to China," said ministry spokesman Kong Quan during Tuesday's regular press briefing.

Kong made the remarks after the embattled Russian oil company said it plans to suspend a portion of its supply to China. The cut would amount to 1 million tons of crude oil.

The company blamed the suspension on its "inability to continue pre-financing of exports" to the China National Petroleum Corporation.

"Yukos will not reduce current production levels, but will redirect these Chinese export volumes into other crude oil marketing channels.Yukos hopes to resume exports to China National Petroleum Corporation as soon as possible," said its statement released on Monday, adding that the suspension which begins on September 28, is "temporarily" and the company's output will remain unchanged.

Up to now, Yukos has been the sole provider of Russian oil to China.

Yukos will continue deliveries to another Chinese oil company, Sinopec, which is to receive about 750,000 tons by the end of the year.

"There is no need to play up the seriousness of the suspension," said Han Wenke, vice-director of the Energy Research Institution under the State Development and Planning Commission.

"The Russian supply of crude oil to China only accounts for about six per cent of China's oil imports," Han said.

"It won't have a serious impact. The Chinese company only needs to readjust its production a little bit or slightly redirect its import volumes through other channels," Han said.

Premier Wen Jiabao and a high-level delegation of ministers left Tuesday for Kyrgyzstan and Russia, where energy co-operation will be highlighted during the visit.

Assistant Foreign Minister Li Hui said at a press conference before Wen's tour that Russia's oil development strategy includes plans for an oil pipeline to China.

"Recently, we have received various kinds of information that shows that Russia will continue with this decision," he said but without giving more details.

"I believe that Premier Wen's visit will have a tremendous effect on Sino-Russian economic and trade co-operation, including co-operation between the two countries in energy," Li said.

Kong said Tuesday that not long ago the two countries reached a consensus on energy co-operation, especially in the oil sector.

"One of the most important points was to expand the size of Russia's exports to China through railway," said Kong.

"Therefore, along this line of thought, we believe the Russian Government would urge relevant companies to make efforts to contribute to the future of the bilateral co-operation in the energy sector."

"The China-Russia co-operation in the energy field benefits both sides," he said.

Earlier this year, Russia's state railway company agreed to more than double rail supplies of crude to China to 300,000 barrels per day by 2006.



 
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