OPEC: Rejects Use of Armed Guards on Ships, Onshore Solution to Piracy Needed [REPORT]

LONDON (Dow Jones)–Somalian piracy could spread further unless an onshore solution is found, the secretary general of the Organization of Petroleum Exporting Countries said in an interview published Tuesday.

Abdalla Salem el-Badri said in an interview with shipping daily Lloyd’s List that Somalian piracy would evolve into “a moveable industry,” threatening shipping beyond its waters in the absence of “a solution not only offshore but also onshore.”

However, in OPEC’s first official comments on piracy, el-Badri rejected the use of armed guards on tankers as potentially “very dangerous.”

Asked if he stood by his view that about 1 million barrels a day in Libyan output would come back on-stream within six months, El-Badri said he is “more confident of Libya production.”

On oil demand, the OPEC secretary general acknowledged economic stagnation in Europe and the U.S. were “a real concern” to OPEC. But he added that strong Chinese demand meant “we should not panic” and release sharp downgrades on growth estimates just yet.

-London Bureau, Dow Jones Newswires