Higher crude, Libya won't force world to tap reserves - Total CEO

08 March 2011 17:04  [Source: ICIS news]

HOUSTON (ICIS)--Rising crude prices and ongoing turmoil in Libya and other parts of north Africa and the Middle East should not force the use of global oil reserves, the chief executive of France-based Total said on Tuesday.

“Using the strategic reserves would send a message that we are scared, and that we don’t know the reason for price increases,” said Total CEO Christophe de Margerie.

“I would suggest not to do this, and just wait and see whether there is a real shortage of oil, which is not the case,” he added.

De Margerie spoke at the CERAWeek 2011 energy conference in Houston.

In recent days, US officials have mentioned the potential to tap oil reserves in the wake of rising prices throughout early 2011.

But the Total executive noted that for Brent crude futures, the $100/bbl mark was broken prior to developments in Egypt and Libya, solely based on prospects for rising demand from China and recovering global economies.

“Now, we’ve only moved from $105/bbl to $115/bbl,” he said. “Yes, it’s an additional 10. But in a normal situation where this is a real shortage, it would move much more than $10/bbl."

De Margerie downplayed the impact of Libya’s 1.6m bbl of capacity on the global market as a whole.

“For the time being, there is no reason to consider that there is a risk of a real shortage,” he said. "Saudi Arabia has already added production to fill the gap."

The CERAWeek 2011 conference lasts through Friday.

For more on Total visit ICIS company intelligence

By: Ben DuBose
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