Libya will seek to increase its oil output quota within the Organization of the Petroleum Exporting Countries (Opec) once it is sure it can produce 1.7 million barrels per day (mbpd), up from about 1.5 million currently, Oil Minister Abdelbari Al Arusi said.
Opec dropped individual allocations in 2011 when it adopted a 30-mbpd output target. But with production rising in Libya and Iraq, the issue of quotas may need to be addressed at some stage. Though individual country quotas are for the moment off the radar, this month’s oil price falls have prompted statements from Venezuela and Iran about a potential extraordinary Opec meeting and the idea of cutting output has been raised, said Simon Wardell, oil analyst at IHS.
“For the first time in a while, people are thinking about cutting. Libya is getting its shots in early, saying we’ve had problems so we don’t want to be constrained,” Wardell said. “Over the next year or two, if oil prices remain weak, then there will be talk not just of Saudi Arabia cutting, but others too.” Libya’s last output target, under a 2008 deal where quotas were not issued publicly, was 1.47 mbpd. Al Arusi said current Libyan oil production was around 1.5 mbpd.
“We will ask to increase our production quota,” Arusi said at the Oil and Gas Summit 2013. Asked by how much the North African country planned to increase its quota, he later told Reuters on the sidelines of the summit: “(The increase) depends on our capability, how much we will produce. We will discuss it at the next meeting on the side and then when we are confident that we will be able to produce 1.7 mbpd, we will make it official,” he added.
The oil exporter group’s next meeting is scheduled for May 31. Brent crude futures LCOc1 rose above $100 a barrel but oil has lost nearly 8.5 per cent since the start of April on concerns about demand as growth slowed in the United States and China, the world’s two largest oil consumers, while recession in Europe deepened.
Libya’s Deputy Oil Minister Omar Shakmak said that Libya aimed for an average 1.5 mbpd output this year and 1.7 mbpd from the third quarter. Al Arusi also said on the sidelines that Libya, with Africa’s largest reserves, aims to start inviting bids for new exploration blocks by the end of this year.
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