OPEC+ leaves output policy unchanged

The Joint Ministerial Monitoring Committee of the Organization of Petroleum Exporting Countries, known as OPEC, has made a significant decision to maintain the current oil output policy unchanged. This move comes after Saudi Arabia extended its voluntary production cut into September, resulting in a further rally of oil prices. The decision by OPEC+ to keep the output steady has had a positive impact on the oil market, leading to increased prices. To delve deeper into the implications of this decision, Kola Karim, the CEO of Shoreline Group, was invited to provide insights on how this development affects African oil producers, particularly Nigeria as it ventures into exploring compressed natural gas. During the CNBC Africa interview, Karim emphasized the strategic nature of OPEC's decision in supporting and stabilizing oil prices. He highlighted the current global supply constraints, including the Russia-Ukraine crisis, which has contributed to the price rally. The tightening of supply, coupled with the decision to extend the production cut, has led to a firming up of prices. However, he stressed the importance of Nigeria focusing on enhancing its production capacity to benefit from the ongoing price rally. Karim emphasized the need for comprehensive engagement between the Nigerian government, NNPC, international oil companies, and local players to increase production. Nigeria, which has been below its peak production levels for some time, needs to step up efforts to close the production deficit and capitalize on the favorable market conditions. Karim noted that while the current oil price range of $80 to $90 per barrel is beneficial, Nigeria must actively work towards increasing its production to maximize export potential. He highlighted the significant gap between Nigeria's current production levels and the desired target of two million barrels per day. Achieving this target would require a concerted effort and a focus on collaboration and transparency within the sector. Additionally, the discussion shifted to the emergence of compressed natural gas (CNG) as a viable alternative for fuelling vehicles in Nigeria. Karim acknowledged the strategic importance of transitioning to CNG, given Nigeria's abundant gas reserves. He commended the government's initiative to introduce CNG-powered buses, citing potential cost savings and environmental benefits. By leveraging Nigeria's gas resources and investing in infrastructure for CNG distribution, the country can revolutionize its transportation sector and reduce reliance on traditional fuels. Karim emphasized the need for swift implementation of infrastructure to support the widespread adoption of CNG vehicles across Nigeria. Overall, the interview highlighted the critical importance of maximizing Nigeria's oil and gas potential amid favorable market conditions and the shift towards cleaner fuel alternatives.