MANILA – Just six months ago, while South-east Asia was reeling from a fuel crisis triggered by the Middle East conflict, the idea that ASEAN member states would be able to band together to build a regional oil stockpile had seemed idealistic, to say the least.
At the grouping’s May summit, leaders agreed to conduct a feasibility study on building a regional oil stockpile, but several questions remained – chiefly, where should the reserves be sited and at what cost? Those familiar with the inner workings of ASEAN were not hopeful that these issues could be hammered out quickly.
Yet, here we are with a promising solution that looks like a nascent version of the region’s first oil-sharing system – a pleasant surprise for the consensus-based grouping that is often criticised for being slow-moving.
At the ASEAN Business and Investment Summit on Nov 13, the Philippines’ state-owned oil company PNOC Exploration Corporation signed separate letters of intent with two companies in Indonesia and Thailand for a pilot that would allow the Philippines to tap oil reserves in an emergency.
The pilot involves a “ticket” system, where the seller agrees to reserve an amount of oil for the buyer at a fee, so that the latter continues to have oil access even during a crisis.