- OPEC+ considering new reductions in crude output in 2019
- Libya with Nigeria was exempted from past cuts due to conflict
Libya’s top oil chief expects OPEC and allied producers to exempt the strife-torn North African country from any future cuts in crude output.
“The OPEC community has understood the difficulties we face – Libya has withheld more than any other country from the global market,” National Oil Corp. Chairman Mustafa Sanalla wrote in a phone message. “This should be factored in.”
OPEC and its allies are considering cutting oil output in 2019 as the group is increasingly concerned about the potential for oversupply. Libya, along with Nigeria, has been exempt from cuts since January 2017 due to domestic conflict. Libya has been rebuilding its energy industry from damage inflicted since a 2011 revolt and collapse in central authority. The nation’s production rose from 660,000 barrels a day in July to almost double that volume currently.
Saudi Arabia’s state-run news agency reported last week that it’s important Libya participate in decisions to re-balance the market through production cuts. Also last week, OPEC Secretary-General Mohammad Barkindo said the group was in talks with Libya and Nigeria about an oil-cuts deal.
OPEC+ has understood the security and investment challenges hampering Libya’s energy revival, Sanalla said. The allied producers have supported the country’s efforts to boost and maintain its production level over the past two years, and he expects them to continue to do so next year, he said.
“It is in the best interests of both OPEC and non-OPEC countries to ensure that NOC and Libya are able to meet their market obligations to ensure price security and lower volatility,” Sanalla said. “Libya remains committed to meeting its contractual obligations to both the market and its OPEC partners and stands ready to respond to demand fluctuations.”
Libya has been pumping at the highest level since 2013, even as Saudi Arabia, OPEC’s top exporter, said the organization and its allies need to reverse an increase in production they agreed to in June and trim about 1 million barrels a day. Libyan output recently hit 1.3 million barrels a day, and the country targets an increase to 1.6 million barrels a day, Sanalla said last month.