Libyan leader Muammar Gaddafi said Tripoli could nationalise foreign oil firms operating in the country unless prices rise to 100 dollars a barrel, the state news agency JANA reported on Saturday. "There have been calls for the nationalisation of the oil and gas industry," he said at a dinner on Friday night for visiting King Juan Carlos of Spain.
"We hope this will not happen. We hope oil prices will rise to a reasonable level," he said. "A price which stabilises at around 100 dollars ... is a reasonable target price." Libyan newspapers have been calling for the sector to be nationalised to enable Tripoli to hold more sway over production levels and on how to react to price falls. Nationalisation was "a legitimate right" and would allow Libya "to control the oil industry without foreign participation," said Gaddafi.
But the Libyan leader, whose country currently produces 1.7 million barrels a day (mbd), gave assurances that no rash decision would be taken. "In the past, decisions on nationalisation have been taken unilaterally and rapidly ... But today I don't think that (Libya's) executive bodies would take any such sudden decision," he said. "There must be a compromise with the foreign partner."
The nationalisation calls have raised fears among foreign oil companies but been seen by many observers as a means to apply pressure on international operators to cut output as prices slide. Libya is the African continent's third-largest oil producer after Nigeria and Angola, and it has estimated reserves of 42 billion barrels. On Friday, New York's main futures contract, light sweet crude for delivery in March, rose 2.80 dollars a barrel from its closing price the previous day to 46.47 dollars.
The higher prices underscored adherence to production cutbacks by the Organisation of Petroleum Exporting Countries, industry analysts said. Since September, the cartel has cut a total of 4.2 mbd from its production to moderate the fall in crude prices, which have plummeted by about 100 dollars per barrel since their record high of 147.50 dollars in July.
Libya, however, earlier this week ruled out the possibility of a new cut in its own output. "We have already reduced our production sufficiently, even going beyond the cut in our quota demanded by Opec. We would not envisage a new reduction," said Libya's Opec representative, Shukri Ghanem.