Nigeria Defends OPL 245 Deal Amidst Renewed Scrutiny
The Nigerian federal government has staunchly defended its handling of the long-standing OPL 245 oil block dispute, dismissing recent criticisms as misrepresentations of a complex, multi-year legal and commercial undertaking. Attorney-General of the Federation, Lateef Fagbemi, a Senior Advocate of Nigeria (SAN), has characterized the situation as a deliberate effort to unlock significant national economic potential, which has been hampered by persistent legal challenges.
Fagbemi asserted that the agreement reached could potentially yield up to 150,000 barrels per day from one of Nigeria’s most strategically important deep-water oil assets. He specifically rebutted comments attributed to the Atiku Abubakar Media Office, labelling them as misleading accounts of a process that has spanned years of intricate negotiations, extensive litigation, and international arbitration.
“OPL 245 has long been recognized as one of the nation’s most commercially promising hydrocarbon assets,” Fagbemi stated. “However, it has remained largely undeveloped due to persistent disputes. The decisive action taken by the current administration is aimed at resolving these issues, limiting financial exposure, and creating the conditions for the asset to be fully developed and brought into production.”
He emphasized the profound significance of this development, noting that the project is designed around a large-scale floating production system and incorporates substantial gas export components linked to Nigeria LNG. For years, OPL 245 represented unrealized national potential. The present outcome, he argued, transforms it into a viable and bankable opportunity capable of delivering considerable economic and social benefits, including increased government revenue, enhanced energy security, and improved investor sentiment.
The Genesis of the OPL 245 Controversy
The origins of the OPL 245 dispute can be traced back to 1998, when the Oil Prospecting Licence (OPL) 245 was initially awarded to Malabu Oil and Gas Limited. The licence was subsequently revoked in 2001 and then reassigned to Shell-linked interests in 2002 during the administration of President Olusegun Obasanjo.
These competing claims ignited a protracted period of litigation, regulatory reviews, and political interventions, ultimately culminating in a series of settlements involving the Federal Government, Malabu, Shell-related entities, and Eni-linked companies.
A pivotal moment in this saga occurred in 2011. At this juncture, the involved parties reached a significant agreement. Under this accord, Malabu relinquished its interest in the block in exchange for compensation. Concurrently, Shell and Eni were granted rights to jointly operate the asset, with plans to convert the licence into an Oil Mining Lease.
Fagbemi highlighted that this complex transaction has undergone extensive review in multiple jurisdictions, including the United States, the United Kingdom, and Italy. Crucially, he noted that these reviews have not resulted in any definitive judicial findings of wrongdoing against the involved companies or the structure of the deal itself.
Furthermore, entities associated with Eni and Nigerian Agip Exploration Limited initiated arbitration proceedings against Nigeria at the International Centre for Settlement of Investment Disputes (ICSID). Their argument centered on alleged breaches of obligations under the Nigeria-Netherlands Bilateral Investment Treaty, stemming from delays in the conversion of the licence. The Attorney-General indicated that Nigeria faced a potential liability exceeding $2 billion in damages and associated costs from these proceedings.
Judicial Rulings Bolster Government’s Position
Recent judicial decisions have significantly strengthened the federal government’s stance on the OPL 245 matter. In May 2025, the Court of Appeal in Abuja dismissed a suit filed by Malabu Oil and Gas Ltd against Agip Oil Company concerning the disputed $1.3 billion oil block. A three-member panel, led by Justice H. A. Barka, set aside a prior 2020 Federal High Court ruling. The appellate court concluded that Malabu’s claims constituted an abuse of the court process.
Fagbemi reiterated that the offshore asset had remained largely untapped due to these prolonged disputes, thereby depriving Nigeria of substantial revenue. He underscored that the current arrangement is specifically designed to facilitate development, mitigate litigation risks, and enhance Nigeria’s investment climate within the deepwater sector.
Eni Affirms Transparency in OPL 245 Transaction
Italian energy giant Eni has reiterated its position that all payments connected to the 2011 resolution of the OPL 245 dispute were made directly to the Federal Government of Nigeria. The company explicitly stated that no payments were channeled through private intermediaries.
Eni maintained that the transaction was conducted under a formal agreement with the Nigerian state and has been subjected to scrutiny by various investigative and judicial authorities. This scrutiny included reports from Italian financial police and external legal audits.
The company further clarified that Malabu Oil and Gas remained the recognized licence holder until the 2011 settlement. Eni stated that Malabu’s compensation was an integral part of a government-brokered resolution aimed at resolving competing claims over the asset.
Tinubu Administration Advances Restructuring of OPL 245
President Bola Tinubu and Eni Chief Executive Claudio Descalzi have agreed on a new plan designed to resolve outstanding issues and bring an end to ongoing arbitration proceedings related to OPL 245. Following a meeting in Abuja on March 5th, both parties consented to restructure the asset into two Petroleum Mining Leases and two Petroleum Prospecting Leases. These will be jointly operated by Nigerian Agip Exploration, Shell, and the Nigerian National Petroleum Company Limited.
The development areas, focusing on the Zabazaba and Etan fields, are estimated to contain approximately 500 million barrels of oil. Planned output is aligned with earlier projections, with anticipated gas exports of up to 200 million standard cubic feet per day to Nigeria LNG.
Under this revised arrangement, pending claims associated with the block are expected to be settled, and arbitration cases at ICSID will be discontinued once the final terms of the agreement are concluded.
President Tinubu described the agreement as a strategic milestone, emphasizing that it reflects his administration’s commitment to resolving legacy disputes and strengthening the country’s investment environment. “This outcome sends a clear signal to global investors that Nigeria is prepared to address legacy issues transparently, uphold the rule of law, and create a stable environment for long-term capital,” he stated.
Olu Arowolo-Verheijen, Special Adviser to the President on Energy, commented that the revised terms represent an improvement on the 2011 agreement. She added that they are now aligned with the Petroleum Industry Act (PIA) and broader fiscal reforms. “The updated structure provides investors with clarity while ensuring stronger value and safeguards for the Federation,” she noted.
Prior reports from Reuters indicated that Nigeria planned to divide the asset into four parts, to be operated by Eni and Shell, as part of efforts to bring it into production.
Criminal Proceedings and Acquittals
The OPL 245 deal attracted significant international attention, particularly after Italian prosecutors alleged that a substantial portion of the $1.3 billion purchase price had been diverted to politicians and middlemen. Reports indicated that approximately half of the funds were traced to accounts linked to businessman Abubakar Aliyu, who was believed to have acted on behalf of senior officials, including former Attorney-General Mohammed Adoke.
In Italy, both Shell and Eni, along with several executives including Claudio Descalzi, faced trial but were acquitted in 2021 after consistently denying any wrongdoing.
In Nigeria, Mohammed Adoke was also charged by the Economic and Financial Crimes Commission (EFCC) in connection with the transaction and his role in the federal government’s attempted resolution of the disputes in 2011. However, he was later discharged by the court due to a lack of evidence of wrongdoing against him. He was similarly cleared in a separate case involving alleged money laundering.
In a book published the previous year, Adoke described the litigation surrounding OPL 245 as wasteful and maintained that the 2011 agreement had successfully saved Nigeria from greater financial exposure.
