Taking advantage of falling oil prices, China's National Development and Reform Commission said it will increase its oil imports in order to build up its strategic reserves, XFN-Asia reported.
Zhang Guobao, vice chairman of the NDRC, said China will also move into the second phase of plans to build strategic reserve facilities. According to the People's Daily, the state planner has finished the draft for the second phase, which includes a total storage capacity of 26.8 million cubic meters.
China's NDRC is also encouraging domestic companies to use spare storage capacity to increase their stockpiles, Guobao said.
At $40 per barrel, it has become cost effective for the government and local firms to stockpile oil.
So far, since efforts began, about 7.3 million barrels of oil have been delivered to the Huangdao facility, the third strategic reserve site.
The first two reserve sites, at Zhenhai and Zhoushan, were filled more than a year ago, and construction of the Dalian facility, the fourth reserve, is expected to be completed by the end of the year.
Ecuador cuts oil production
In order to comply with the recent decision by the Organization of Petroleum Exporting Countries to cut oil production, Ecuador has agreed to cut production in the country by foreign oil companies.
Ecuadorian President Rafael Correa said the government will reduce the volume of oil produced by a number of foreign companies operating in Ecuador in order to meet OPEC's cuts, the Latin American Herald Tribune reported.
"It's not just (state corporation) Petroecuador that has to reduce production but private firms as well -- which are also losing us money," Correa said.
OPEC has called for a cutback of 22 million barrels per day of oil for members of the cartel, and Ecuador's share is 40,000 barrels per day.
Correa said production contracts with private companies have been renegotiated, but an agreement with Italian firm Agip that was losing money has been completely cut.
With this strategy "the country will lose little," said Correa, who also used the occasion to defend his decision to bring Ecuador back into OPEC last year, despite criticism from the opposition.
Ecuador puts out about 550,000 barrels of crude oil per day, and oil is Ecuador's main export providing, about 35 percent of the nation's budget.
Petroecuador produces about 60 percent of the country's oil, and the remainder comes from about a dozen foreign companies.
CNOOC announced a deal with CPC
China National Offshore Oil Corp., China's largest offshore oil and gas producer, has said it will work with Taiwan-based CPC Corp. to explore and exploit oil and gas overseas.
CPC is a petroleum, natural gas and petrochemical company based in Taiwan.
The agreement comprises four separate cooperative agreements. The first agreement would require CNOOC Africa Ltd. to sell 30 percent of its 70 percent stake in Kenya's No. 9 Block to OPIC Chad Corp. under CPC.
The second part of the deal was a renewal of an agreement signed in 2002 for drilling three exploratory wells off the coast of southern Taiwan.
The third deal is a feasibility study for exploration wells in the Nanridao Basin off the coast of northern Taiwan. And the fourth agreement is for further cooperation in natural gas development, crude oil refining and trade of oil products.
Closing oil prices, Dec. 29, 3 p.m., London
Brent Crude oil: $37.64
West Texas Intermediate crude oil: $39.20