Nigeria has finally moved to unlock one of its largest deepwater oil reserves by splitting the long-disputed OPL 245 block into four new assets to be operated by Eni and Shell, a decision that could end nearly three decades of legal battles and pave the way for production. According to a source familiar with the development cited by Reuters, final contracts are expected to be signed imminently, clearing the path for development of a field estimated to hold recoverable reserves of around 9 billion barrels .
The financial stakes for Nigeria are immense. A study by Global Witness found that the controversial 2011 deal that transferred the block to Eni and Shell for $1.3 billion resulted in a $5.86 billion loss in government revenue, based on an average oil price of $70 per barrel. The NGO calculated the shortfall using IMF benchmarks indicating that a mature producing country should retain between 65 and 85 percent of oil revenues, compared with 41 percent under the original terms. Global Witness said the gap was equivalent to nearly twice the combined annual budgets for health and education at the time .
OPL 245 was originally awarded in 1998 to Malabu Oil and Gas, a company linked to former oil minister Dan Etete, who served under the Sani Abacha regime . Shell later entered the project and carried out exploration work that led to two major discoveries, Zabazaba and Etan, confirming the block’s strategic value. However, its economic potential fueled political and legal battles, and ownership became the subject of multiple cases in Nigerian and international courts .
In 2011, the state agreed to transfer the block to Eni and Shell in the $1.3 billion deal. Italian prosecutors later alleged that most of the money was diverted to politicians and intermediaries. Several executives from both companies, including Eni Chief Executive Claudio Descalzi, were prosecuted in Italy. All were acquitted in 2021 after denying wrongdoing . Despite the acquittals, parallel legal proceedings in Nigeria, the United Kingdom, and Italy kept the field frozen, preventing development. Amid the fallout, the block reverted to state control in January 2017 pending a final settlement .
The restructuring into four separate blocks is designed to secure the assets legally, clarify contractual responsibilities, and allow development to move forward . For the Nigerian government, the objective is also to boost state revenue amid mounting fiscal pressures and to increase crude production capacity at a time when the government is seeking to ramp up output and attract fresh capital into the deepwater segment .
Eni and Shell declined to comment on the latest development, while Nigeria’s state oil firm, NNPC Limited, had yet to issue an official statement . If successfully executed, the development of the block is expected to significantly raise Nigeria’s crude oil production and generate substantial revenues for the federation.
