Cairo: Libya's Oil Minister Abdul Rahman Bin Yezza said yesterday that there is a "gentlemen's" agreement in the Organisation of Petroleum Exporting Countries (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," the minister said, 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 a day by mid-2012, the head of the country's National Oil Company said earlier yesterday.
Arab oil ministers were in Cairo for a meeting of the Organisation of Arab Petroleum Exporting Countries (Oapec), yesterday. 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, responsible for about a third of the world's oil production, 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 overproduction 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.
Bin Yezza said yesterday that a possible Opec discussion of individual quota "will depend on the market, supply and demand."
The group's December agreement came after Opec's 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 Opec members, including Saudi Arabia, had then wanted to raise production, while Iran and others wanted to maintain output.
Opec secretary general Abdullah Al Badri had at the time 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.
Most Opec members are currently producing well above their quota. Saudi Arabia, for example, has said it pumped 10 million barrels a day in November against a quota of 8.1 million barrels. Venezuela pumped 2.4 million barrels per day in November, about 400,000 barrels a day above its quota, according to Opec.