Nigeria sets up committee to probe three oil spills

Nigeria's House of Representatives has established a committee to investigate the issues surrounding abandoned oil wells and spills originating from three Oil Mining Leases (OMLs). Simultaneously, the OPEC+ consortium is in the midst of their meetings, deliberating on the prospect of increasing oil production beyond August. Kola Karim, Chairman of Shoreline Group, shed light on these developments in an interview with CNBC Africa from Lisbon, Portugal. Karim started by discussing his involvement in a state visit led by President Muhammadu Buhari to Portugal, aimed at fostering stronger business ties between Nigeria and Portugal, particularly in construction, infrastructure development, and energy. Various Nigerian and Portuguese entities, including the NNPC and CMI, participated in discussions surrounding investment opportunities. Switching gears back to Nigeria's oil and gas sector, Karim addressed recent reports of well-head disruptions at OML-18, highlighting the swift response by relevant agencies to contain spillages and mitigate environmental damage. He also expressed optimism for the NNPC's transition to a limited liability company, effective the following day, projecting easier access to financing and increased efficiency in industry operations. Moving on, Karim commended the recent auction of marginal field licenses in Nigeria, emphasizing the significance of empowering local players and boosting domestic oil production. Transitioning to the ongoing OPEC+ meetings, Karim anticipated a potential addition of 648,000 barrels per day to the global oil market to stabilize escalating prices influenced by geopolitical tensions and supply constraints. Concerns over production capacity were raised due to production challenges in key oil-producing nations such as Venezuela and Iran. Karim underscored Nigeria's struggle to meet contractual quotas, alongside countries like Angola and Iraq, posing a significant challenge for OPEC's supply management efforts. In conclusion, Karim predicted sustained high oil prices in the second half of the year driven by rising global demand, exacerbated by limited investments in the oil sector and regional consumption spikes. He forecasted oil prices to range between $115 to $125 per barrel in the near term, emphasizing the precarious balance between supply and demand dynamics in the market.