Jun 9, 2011
VIENNA // Libya waited until the last minute to send a delegate to yesterday's Opec meeting in what is being interpreted as a message the regime led by Muammar Qaddafi remains in control despite the ongoing civil war.
Omran Abu Kraa, Libya's former electricity chief, entered Opec headquarters hours into yesterday's ministerial deliberations through a basement garage, avoiding reporters waiting at the building's entrance. Since conflict gripped the country in February, its energy industry has been crippled by the exit of foreign oil companies, international sanctions and attacks on infrastructure.
"They want to still have a say," said Catherine Hunter, an analyst with IHS in London. "It keeps the illusion of normality. It's not a done deal that the government side will not prevail, so they've got to keep up their representation as a sovereign state. It would be an admission of defeat to not come."
Libyan rebels adjust an anti-aircraft gun as smoke from a damaged oil facility darkens the sky in Ras Lanuf, Libya. Getty Images
The organisation that controls more than 40 per cent of the world's oil supply was meeting for the first time since popular uprisings took place in parts of the Middle East and North Africa and sent the price of oil as high as US$127 a barrel.
In Libya, civil war has shut down most of its production capacity of 1.6 million barrels a day (bpd).
Last week Libya's former top oil official, Shokri Ghanem, announced his defection from Col Qaddafi's regime and stepped down from his post as Libya's head Opec negotiator and chairman of National Oil Corporation, the state oil company.
At stake yesterday was whether Libya should be exempt from a system that caps the production of member countries. If Libya were to join Iraq in being exempt from the quota system, the significance of Opec's output target could be further eroded. The ceiling is now at 24.8 million bpd, but members pump about 1.5 million bpd in excess of that, according to most estimates.
"Libya is almost theoretical at the moment because it can't actually ramp up production," said Ms Hunter, adding that redistributing Libya's quota would be an impractical solution for Opec. "What happens when Libya comes back? There's so much sensitivity about the quota system to begin with. Anything that would affect new lines in the sand on quota distribution would be contentious and would probably take more than a day."
Before the start of yesterday's meeting Libya's seat was conspicuously empty. But officials made an effort to project a common front.
"We have to be united," said Abdullah el Badri, the secretary general of Opec. "We have no other choice."
Mr el Badri deflected questions about Libya, his home country, and said he would "facilitate anybody who will want to come here".
Representatives of Libya's opposition forces, who had said they were interested in sending delegates to the meeting, were nowhere to be seen.
"At Opec, they don't want to do these things — invite rebels — otherwise they might have problems in the future," said Ehsan Ul-Haq, a senior market consultant with KBC, an energy economics consultancy. "And Opec doesn't want to create problems."
Mohammed al Sada, the oil minister of Qatar, who has backed the opposition in Libya by providing military aid and marketing Benghazi crude, insisted the discussions would not be affected by politics.
"The focus today is the economy," he said. "The focus is the supply and demand, the fundamentals.
"This is an economic type of forum so we are not addressing the political issue, though Qatar recognises the National Transitional Council and helping our Libyan brothers in many facets; we're going to continue."
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