By Chika Amanze-Nwachuku
The Organisation of Petroleum Exporting Countries (OPEC) said it has recognised the National Transitional Council (NTC) as Libya’s representative. Libya is one of the major oil producers in Africa and a committed member of OPEC.
The OPEC's recognition, according to a report by Aljazeera came after the United Nations approved a Libyan request to accredit envoys of the country's interim government as Tripoli's sole representatives at the world body last Friday.
“OPEC will recognise the NTC ... and they will sit in the same chair,” OPEC’s Secretary General Abdullah al-Badri was quoted by the agency to have said at the just-concluded Gulf Intelligence energy forum in Dubai.
Saudi Arabia and its Gulf OPEC allies had raised their oil production over the last few months, after failing to convince other OPEC members at their last meeting in Vienna in June to raise output to make up for the loss of Libyan crude since February. Badri said those countries are likely to gradually decrease their output as Libya's production recovers towards pre-war levels.
Badri, who was the Libyan energy minister for ten years (1990-2000) and headed its National Oil Corporation (NOC) until 2006, said production in fields in central Libya could be back to pre-war levels in 15 months, while other areas might take longer. Some Libyan oil fields have recently restarted production but it remains unclear when they will return to pre-war levels of about 1.6 million barrels per day.
He said: “As long as Libya starts to produce more and more, it is in the other OPEC members’ best interest to produce less”. He added: “I don’t talk to member countries individually about this; the market sorts itself out.”
In August, Saudi Arabia raised its production of oil and attempted to persuade other OPEC members to do the same in order to stabilise oil prices amid uncertainty in the global economy.
To help compensate for the international market’s loss of 1.6 million barrels a day of Libyan crude as early as February, Saudi output rose above 9.8 million barrels a day by June from around 9.1 million in February.
That was trimmed back to 9.6 million barrels a day in July, after the June announcement by the International Energy Agency of a planned 60-million-barrel release from the United States and other developed nations’ stockpiles; but it rose again to about 9.8 million barrels a day in August, according to Reuters, based on figures from the Joint Organisations Data Initiative, a producer-consumer information exchange programme.
Facilities in the eastern and western border areas of Libya, like the fields of the Italian company ENI near the Algerian border and fields operated by Repsol of Spain and Total of France in the west, have reported no damage and continue to produce up to 600,000 barrels of oil per day in total, he said. Facilities in the centre of the country, however, have been affected and output has fallen.
“Most production comes from the middle of the country and not all of this is damaged,” Mr. Badri said. “Some facilities work here and there, coming up with 200,000 to 300,000 barrels of oil per day.”
Damage to facilities includes broken instruments, which he said was a bigger challenge to resuming full production than any posed by security issues.
“I’m afraid of what happened in Iran and Iraq, where a lot of instrumentation was lost - meters and small things that you can’t just go and buy from a shelf, but needs time and money to manufacture,” Badri said. “We don’t want to start full production and realise that the instruments are not there.”