Karim: Nigeria should join BRICS, sell crude in naira

Nigeria, a major player in the African oil market, is at a crucial turning point in its oil production and trade strategies. Kola Karim, the CEO of Shoreline Group, recently discussed the opportunities and challenges facing Nigeria in an interview with CNBC Africa. Karim highlighted the significant progress Nigeria has made in stabilizing its oil production, enhancing its refining capacity, and the potential benefits of joining the BRICS economic bloc. The key theme of the interview was centered around Nigeria's readiness to capitalize on global oil demand and maximize its economic potential. Karim pointed out that Nigeria has historically faced challenges with meeting its OPEC quotas due to operational and security issues. However, he noted that the current administration has made significant strides in addressing the security situation in the Niger Delta region, leading to improved production performance. Nigerian banks have also played a crucial role in supporting local oil companies, further boosting the industry's growth. With the expected resumption of refineries in Port Harcourt, Kaduna, and Warri, Nigeria is poised to enhance its refining capacity significantly. One of the most anticipated developments in Nigeria's oil industry is the completion of the Dangote Refinery, set to become the largest refinery in Africa. The refinery, along with the refurbishment of existing facilities, will potentially raise Nigeria's refining capacity to 1.1 million barrels a day. This enhancement will not only position Nigeria as a leading African refiner but also bolster its foreign exchange earnings and domestic fuel supply. Karim emphasized the importance of ensuring an adequate supply of crude oil to feed the expanded refining capacity, urging the government and its partners to increase production efforts. Karim proposed that Nigeria consider joining the BRICS economic bloc to diversify its trading partners and reduce its reliance on the US dollar. He argued that Nigeria, as the largest economy in Africa, should have been part of BRICS years ago. By engaging with BRICS countries such as Brazil, Iran, and Russia, Nigeria could benefit from new trading opportunities and financial structures. Karim highlighted the potential for conducting trade in local currencies like the Nigerian Naira, rather than relying solely on the US dollar for transactions. In terms of oil price outlook, Karim projected that oil prices would likely remain in the range of $75 to $85 per barrel in the current quarter. He attributed this stability to the steady global consumption levels and economic recovery trends. While industrial output may be slightly lower, particularly in OECD countries and emerging markets like China and India, Karim expressed confidence in the gradual improvement of the global economy in the coming months. He anticipated a marginal increase in global oil consumption, maintaining the overall demand for OPEC-produced oil. Overall, the interview with Kola Karim shed light on Nigeria's growing potential in the global oil market and the opportunities for leveraging its oil resources more effectively. As Nigeria navigates its refining capacity expansion, explores new trading partnerships, and monitors oil price trends, the country stands at a critical juncture in shaping its oil industry's future and maximizing its economic benefits.