Nigeria has broken up its prized OPL 245 deepwater oil block into four new assets to be co-developed by Shell Plc and Eni SpA, clearing the path for production at one of Africa’s most valuable and most controversial, untapped reserves, according to a person familiar with the matter.
Final contracts are expected to be signed beginning Monday, said the source, who requested anonymity because they are not authorised to speak ahead of an official government announcement.
Eni and Shell declined to comment. Nigeria’s state-owned oil company, the Nigerian National Petroleum Company, also had no immediate comment.
The agreement marks a pivotal turn for OPL 245, a deepwater block estimated to hold as many as 9 billion barrels of oil, a reserve that has sat idle for nearly three decades, strangled by overlapping litigation across multiple jurisdictions and the shadow of one of the petroleum industry’s most closely watched corruption cases.
“This has been one of the longest-running disputes in African energy history,†said one Lagos-based oil sector analyst. “Getting it into production would be transformational for Nigeria’s output ambitions.â€
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A history marred by controversy
The block’s troubled past traces back to 1998, when Nigeria originally awarded the licence to Malabu Oil and Gas, a company linked to Dan Etete, who served as the country’s petroleum minister under military ruler Sani Abacha. Years later, Malabu transferred the licence to Shell and Eni in a deal valued at $1.3 billion.
Italian prosecutors subsequently alleged that the bulk of that sum was funnelled to politicians, government officials, and well-connected intermediaries rather than to Nigeria’s public coffers. The allegations triggered a landmark criminal trial in Milan, drawing in both companies alongside a roster of senior executives, including Eni chief executive officer Claudio Descalzi. All defendants denied wrongdoing, and in 2021, an Italian court acquitted them on all charges.
The case nonetheless left lasting reputational damage and cast a long legal and political shadow over the field’s future.
Abuja moves to unlock value
Nigeria’s government has signalled for years its desire to resolve the impasse and bring OPL 245 into production, eager to shore up oil revenues at a time when output from ageing onshore fields has been eroded by theft and infrastructure decay.
The country produced roughly 1.5 million barrels per day in recent months, well below its OPEC quota and its own targets, putting pressure on Abuja to fast-track development of frontier assets.
Splitting the block into four separate operating units is seen as a practical step to accelerate permitting, financing, and field development planning, while distributing operational risk between the two European majors.
Shell has been repositioning its Nigerian portfolio in recent years, having sold several onshore assets amid persistent security and community challenges.
OPL 245, as a deepwater block, represents the kind of high-value, lower-risk project the company has said it prefers. Eni, meanwhile, has maintained a long-term commitment to West African deepwater exploration and production.
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Stakes are high
At 9 billion barrels of estimated reserves, OPL 245 ranks among the largest undeveloped oil discoveries on the African continent. Bringing it into full production could add hundreds of thousands of barrels per day to Nigeria’s output, potentially reshaping the country’s fiscal position and its standing within OPEC.
Development, however, will not be swift. Deepwater projects of this scale typically require years of front-end engineering, environmental approvals, and infrastructure buildout before first oil flows. Industry watchers estimate production could still be a decade away under optimistic timelines.
