Libya Orders Oil Cuts of 270K Barrels Per Day

By Tarek El-Tablawy Khaled El-Deeb

Tripoli, Libya -- Libya has asked oil companies to slash production by 270,000 barrels per day from Jan. 1, the latest such reduction by an OPEC member as the producer group struggles to boost faltering oil prices.

The announcement Tuesday by the head of the National Oil company came as the 13-member Organization of Petroleum Exporting Countries appears to have stepped up compliance with a series of production cuts over the past three months. The group is trying to halt a nearly 70% plunge in crude prices since mid-July highs of nearly $150 per barrel.

Shukri Ghanem, Libya's oil chief, told The Associated Press the country would cut almost 20,000 more than the 252,000 barrel per day reduction it was committed to under the group's quota system. The cuts, effective Jan. 1, would be from September levels.

"The corporation has asked oil companies (in Libya) to cut output by 270,000 barrels per day, which is more than Libya is required to do under the OPEC-brokered agreement" in Oran, Algeria, Ghanem said in a telephone interview on Tuesday.

"This is a positive step for boosting oil prices, and I believe that all the (OPEC) countries will abide with the agreement," Ghanem said.

In its Dec. 17 meeting in Algeria, the group agreed to slash output by a further 2.2 million barrels per day from January 2009, bringing its total cuts since September to 4.2 million barrels per day. OPEC produces over 40% of the world's crude.