The Federal Government has taken a decisive step to bring an end to the long-running and controversial Malabu oil case, breaking up Oil Prospecting Licence (OPL) 245 into four new assets to be operated by Eni and Shell.
The restructuring, according to a source familiar with the development, effectively clears the way for the long-delayed development of one of Nigeria’s largest untapped deepwater reserves, potentially closing a turbulent chapter that has spanned nearly three decades of legal, political and commercial disputes across multiple jurisdictions.
The source, who spoke to Reuters on condition of anonymity because they were not authorised to comment ahead of an official announcement, said final agreements for the newly created assets were expected to be signed beginning Monday.
The move is widely seen as signalling the settlement of the protracted dispute over OPL 245, a block that has remained idle despite being regarded as one of Nigeria’s most prolific offshore oil assets.
OPL 245, at the centre of the Malabu saga, was originally awarded in 1998 to Malabu Oil and Gas, a company linked to former Nigerian oil minister, Dan Etete. Years later, the licence was acquired by Eni and Shell in a transaction valued at about $1.3 billion.
However, the deal soon became embroiled in what was described as one of the oil industry’s most high-profile corruption cases. Italian prosecutors alleged that a significant portion of the purchase price was diverted to politicians and intermediaries, triggering investigations and court proceedings in Nigeria, Italy and other countries.
The case culminated in a lengthy trial in Milan involving the two oil majors and several of their executives, including Eni’s Chief Executive Officer, Claudio Descalzi. In 2021, an Italian court acquitted Eni, Shell and the executives of all wrongdoing, bringing the European criminal proceedings to a close. The companies had consistently denied any misconduct throughout the trial.
Despite the acquittal, the cloud of litigation and regulatory uncertainty stalled progress on the block, leaving the vast deepwater reserves undeveloped for almost 30 years.
Industry analysts say the Federal Government’s latest decision to split OPL 245 into four separate assets represents a practical and commercial solution designed to finally unlock the field’s potential while drawing a line under the long-running dispute.
By restructuring the block, the government is expected to simplify operational arrangements, reduce lingering legal complications and provide clearer pathways for investment approvals and final development decisions.
Successive administrations had expressed determination to resolve the impasse and monetise the asset, particularly at a time when Nigeria is seeking to boost crude oil output, strengthen foreign exchange earnings and attract fresh capital into its upstream sector.
The development of the restructured assets could significantly increase Nigeria’s oil production capacity once brought on stream, given the scale and strategic importance of OPL 245 within the country’s deepwater portfolio.
While Eni and Shell declined to comment on the latest development, Nigeria’s state oil firm, Nigerian National Petroleum Company Limited, had not issued an official statement as of the time of filing this report.
Energy experts note that beyond its production potential, the settlement of the OPL 245 dispute carries symbolic weight for Nigeria’s oil industry. For years, the Malabu case was cited globally as an example of governance and transparency challenges in the sector. Its resolution could help restore investor confidence and reinforce the government’s commitment to regulatory certainty.
With final agreements expected to be signed in the coming days, attention will now turn to the formal unveiling of the new asset structure and timelines for field development.
If successfully implemented, the restructuring of OPL 245 may not only mark the end of one of the oil industry’s most controversial legal battles but also usher in a new phase of investment and production growth in Nigeria’s deepwater frontier.
