OPEC Production Up in October According to Platts

OPEC members pumped a combined 27.51-million b/d of crude in October, up 230,000 b/d from September levels, as Iraqi output continued to recover, a Platts survey of OPEC and oil industry officials showed November 10.

Iraqi production rose from 1.43-mil b/d in September to 1.7-million b/d in October, an increase of 270,000 b/d.

Excluding Iraq, the ten members with quotas under an overall ceiling of 25.4-million b/d produced an average 25.81-mil b/d over the month, a 40,000 b/d dip from September's 25.81-mil b/d, the survey showed.

These ten members exceeded their ceiling, which was superseded by a new, lower ceiling of 24.5-million b/d November 1, by 410,000 b/d. They will have to cut output by more than 1.3-million b/d in November in order to meet the new ceiling, agreed in a surprise decision at OPEC's last meeting on September 24.

"Given current high prices, there was little incentive for producers to rein in output," said John Kingston, global director of oil at Platts. The OPEC basket stood at $28.30/bbl Monday, above the cartel's $22-28/bbl target band.

Among the OPEC-10, cuts totaling 130,000 b/d from Saudi Arabia, Iran, the UAE and Qatar were partly offset by 90,000 b/d in increases from Indonesia, Kuwait, Nigeria and Venezuela. But despite having increased production month-on-month, Venezuela-whose production problems have continued in the wake of last winter's two-month crippling strike-and Indonesia failed to produce their respective quotas to the tune of more than 300,000 b/d each. All other members with quotas exceeded them.

Attention is becoming increasingly focused on the quota issue as member countries work to expand their production capacity through foreign investment. Algeria, Libya and Nigeria are openly seeking bigger shares of OPEC production. Algeria overproduced its 811,000 b/d quota by 359,000 b/d in October and is thought unlikely to shave volumes in November in line with its new lower quota of 782,000 b/d.

Libya, according to prime minister Shokri Ghanem during a visit to London last week, is currently capable of producing 1.7-million b/d. Ghanem said Tripoli's top oil official, Abdulhafid Zlitni who heads the National Oil Co and Libya's OPEC delegation, had been instructed to ask OPEC for a disproportionate increase in its quota. Ghanem could not say, however, whether Zlitni would submit the request at the next meeting on Dec 4. Nor did he say how much of an increase in its quota Libya was seeking.

After large-scale disruptions caused by political unrest in the oil producing Niger Delta earlier this year, Nigerian production has recovered to reach 2.23-million b/d, its highest level since March 1998, according to Platts data.