Africa: Opec Oil Production Hits Three – Year High

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Crude oil output of the Organisation of Petroleum Exporting Countries (OPEC) rose in December to the highest since October 2008, mainly due to a further recovery in Libya’s production, a Reuters survey has revealed.

The survey of sources at oil companies, OPEC officials and analysts showed that supply from all 12 members of the OPEC averaged 30.74 million barrels per day last month, up from a revised 30.62 million bpd in November.

According to the survey , the OPEC, which supplies more than a third of the world’s oil, is producing more than the target of 30 million barrels daily it adopted at a December 14 meeting, as oil prices well above $100 a barrel provide little incentive for supply cuts.

December’s total is OPEC’s highest since October 2008, shortly before the group agreed to a series of supply curbs to combat recession, based on Reuters survey. The biggest increase in OPEC supply last month, the survey further revealed came from Libya, where production continued to recover after being virtually shut down during the uprising, which toppled Moammar Gadhafi.

Libyan oil exports and refinery demand have climbed to 750,000 bpd in December, according to the survey, up 250,000 bpd from November but some way short of the production figures given by Libyan officials.

Libya’s Oil Minister, Abdul Rahman Bin Yezza, disclosed recently that there was a “gentlemen’s” agreement in the OPEC to accommodate the country’s crude oil as production recovers.

“There is a gentlemen’s agreement to accommodate Libya’s production, but nothing formal,” Dow Jones quoted the minister to have said at an Energy forum in Cairo, when asked if Gulf countries had promised to cut output next year when production at the North African country recovers.

Libya is currently producing over one million barrels of crude oil per day and expects to boost output to pre-war levels of about 1.6 million barrels per day by mid-2012, the head of the country’s National Oil Company said.

Arab oil ministers were in Cairo for a meeting of the Organisation of Arab Petroleum Exporting Countries (OAPEC ) .

Seven of the members of OAPEC are also members of OPEC. They are Algeria, Iraq, Kuwait, Libya, Qatar, Saudi Arabia and the United Arab Emirates.

OPEC, earlier this month unified in an agreement to maintain the bloc’s output levels, but in a sign of continuing tension among members, avoided a decision on how much oil each individual member would produce.

The decision came amid growing fears that the continuing Eurozone debt crisis will trigger a recession in Europe and hurt global oil demand.

The group however raised a production ceiling governing how much OPEC as a whole can produce to 30 million barrels a day, from 24.845 million barrels a day, although over – production by some members and the inclusion of Iraq in the group’s ceiling means the new level is the same as current production.

The group also pledged to monitor production levels by individual members, but a failure to set country production quotas means the new ceiling could again be threatened by overproduction.

OPEC ‘s December agreement came after its last meeting in June ended in failure to agree a deal amid bitter discord over whether to raise oil production.

Rising oil prices have helped fuel global inflation, and some O PEC members, including Saudi Arabia, had then wanted to raise production, while Iran and others wanted to maintain output.

 

Source: All Africa.Com – 10 Jan 2012


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