Oil production is fast recovering to normalcy in Libya.
Nuri Berruien, chairman of its state-run National Oil Corp told reporters in Cairo today that Libya is now pumping ?more than a million? barrels a day.
International Energy Agency (IEA) on Nov. 10 said oil production in Libya was resuming far faster than initially expected and praised the “Herculean effort” by the country’s officials to restore shut-down oil fields.
Libya holds Africa?s biggest oil reserves and was pumping about 1.6 million barrels a day in January. Libya’s proven oil reserves are 45 billion barrels. Before the Libyan crisis, the country produced 1.6 million barrels per day and 1.3 million barrels of these volumes were exported.
Libya’s oil minister Abdul Rahman Ben Yezza had said on 14 December that the country is seeking to raise its production to 2 million barrels a day in three-to-five years? time.
Libya is a member of both OPEC and OAPEC. Apart from Libya, Saudi Arabia, Qatar, Kuwait, Iraq, the United Arab Emirates and Algeria are all members of both OPEC and OAPEC. OAPEC was established in 1968 to foster the development of the petroleum industry in member states as part of an economic integration plan among Arab countries.
The 12 members of OPEC are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. OPEC is responsible for about a third of the world?s oil production.
OPEC set a new production ceiling for the first time in three years at its Dec. 14 meeting and agreed for a target output of 30 million barrels a day. Some members are concerned that the current state of world economy, especially the Europeran debt crisis will drive the world toward recession and hurt global oil demand, and thus wanted to up production. Saudi has always been in favour of raising the production while Iran and other wanted to maintain output.
However, OPEC avoided taking a decision on how much oil each individual member would produce.
Ben Yezza said today in Cairo there?s a ?gentleman?s agreement? within OPEC to accommodate the return of Libyan oil.
OPEC Secretary General Abdalla el-Badri had said OPEC would address the question of individual production quotas for the group?s members when Libya hits its full pre-war output. OPEC officials had dismissed the risk that the agreement could encourage additional overproduction.
Benyezza said Saturday that a possible OPEC discussion of individual quota ?will depend on the market, supply and demand.?.
While the oil sector dominates Libya’s economy, local and foreign businesses are hoping that a more open and transparent government will make it easier to work in the Libyan market, especially the infrastructure sector, health care and education – areas that the interim authorities have said will be of priority interest for spending next year.
On Nov 11 Libya’s interim Oil Minister Ali Tarhouni said oil and gas will remain the driver of economic development and growth for the foreseeable future in Libya, which before the war was the world’s 18th-largest oil exporter.
Sources: Bloomberg, Market Watch, Turkish Weekly, The Australian