Libya rejects OPEC oil cuts

Published November 28th, 2016 - 07:00 GMT
Libyan rebels sit with an anti aircraft weapon in front of an oil refinery. (AFP/File)
Libyan rebels sit with an anti aircraft weapon in front of an oil refinery. (AFP/File)

Libya says it cannot be part of an imminent deal by members of the Organization of the Petroleum Exporting Countries (OPEC) for cutting down oil production levels, saying it will push for increased income to make up for the militancy and political uncertainty in the country.

“Libya is in such a dangerous economic situation, there is no way it can participate in OPEC production cuts for the foreseeable future,” Chairman of Libya’s National Oil Corporation (NOC) Mustafa Sanalla said on Sunday.

OPEC members are to gather this week in Vienna to finalize output cuts which were agreed to in a meeting in Algiers in September. The initiative is meant to boost prices in the market after nearly two years of steep depression.

Sanalla said the unrest in Libya, which has gripped the country since the fall of dictator Muammar Gaddafi in 2011, makes it impossible for Tripoli to contribute to any OPEC output cuts.

“The important thing now is that all Libyans should benefit from increased revenues. This will be the real test of whether we can pull through our current political crisis and keep our oil flowing,” he said.

The violence in Libya has significantly impacted the country’s oil production. Estimates show that the North African state now produces about 600,000 barrels per day (bpd), nearly a third of its production before the armed revolution. The NOC’s rejection of OPEC output cuts comes as officials in the company had earlier announced plans for doubling the output in 2017.

The OPEC meeting in Vienna is expected to be a tough one as details of the Algiers deal and how to distribute the cuts among the members are planned to be worked out in the formal gathering.

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