Libyan delegate arrives at Opec meeting

The arrival of Libya's Opec delegate adds uncertainty into the group's already difficult negotiations.

VIENNA // Libya's Opec delegate arrived three hours into the group's meeting, injecting uncertainty to the group's already difficult negotiations.

Omran Abu Kraa, Libya's former electricity chief, entered Opec headquarters in Vienna through a basement garage today, avoiding reporters waiting at the building's main entrance.

“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.”

The organisation that controls more than 40 per cent of the world's oil supply is meeting for the first time since conflict took hold in Libya in February. The civil war has crippled Libya's former oil production of 1.6 million barrels a day and sent the opposition forces to Qatar for help in marketing its crude.

At stake today is whether Libya should be exempt from a system that caps the production of member countries. Only Iraq is currently exempt from Opec quotas.

Last week Libya's former top oil official, Shokri Ghanem, announced his defection from the North African nation and stepped down from his post as head Opec negotiator and chairman of National Oil Corporation, the state oil company.

This morning Libya’s seat lay conspicuously empty as oil ministers prepared for what is expected to be Opec’s most contentious meetings in years. But officials yesterday morning made an effort to project a united front.

“We have to be united,” said Abdullah al Badri, the secretary general of Opec. “We have no other choice.”

If Libya were to join Iraq in being exempt from the quota system, the significance of Opec’s output target would be further eroded. The ceiling is now at 24.8 million barrels a day, but members are now pumping about 1.5 million barrels 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’a 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.”

The oil minister of Qatar, which has backed the opposition in Libya by providing military aid and marketing the Benghazi crude, insisted that the discussions would not be affected by politics.

“The focus today is the economy. The focus is the supply and demand, the fundamentals,” said Mohammed al Sada, the Qatari oil minister. “This is an economic type of forum so we are not addressing the political issue, though Qatar recognizes the National Transitional Council and helping our Libyan brothers in in many facets; we’re going to continue.”