Libya believes high oil prices are due to external factors

Apr 21, 2004 02:00 AM

Libya's Oil Minister Fathi bin Shatwan said that Libya had started to comply with its new OPEC output quota of 1.258 mm bpd of oil, but declined to comment on when his country would be fully compliant. The minister said the current high oil prices are due to "psychological" factors that are out of OPEC's control.
The minister, speaking on the sidelines of an industry event in Tripoli, said he was looking to attract $ 30 bn of foreign investment to develop Libya's energy sector. As part of that plan, Libya aims to increase its output capacity from its current level of 1.7 mm bpd to 3 mm bpd in the next seven to 10 years.

Shatwan reiterated that Libya has requested a higher OPEC quota that would reflect its production capacity. He said he would like to see a "good" oil price and went on to say that "the problem isn't the price, it's the value which is going down," referring to the decline of the dollar.
Shatwan said that he is in discussions with US oil companies, who he said are eager to invest in the development of Libya's energy sector. He didn't say who the companies were, but implied that a group of companies that had previously been present in Libya wanted to return -- "they are anxious and ready".

But he said that these talks weren't exclusive to those companies and discussions were ongoing with other US oil companies as well as other foreign oil companies. Referring to expectations that the US is preparing to ease economic sanctions on Libya, he said "they (the US oil companies) are awaiting the decision of their government."
Shatwan said Libya's proven crude oil reserves stand at 36 bn barrels, although he said experts believe this figure could be as high as 100 bn barrels.
Libya is preparing a new licensing round for the development of its gas sector, which would be ready within a couple of months, Shatwan said. Libya also is working on a new hydrocarbons law that should be ready by the end of 2004.

Source: Dow Jones
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