• Nigeria to split OPL 245 into four blocks

• Move ends decades-long legal disputes over oilfield

• Development to proceed on 9 billion-barrel reserves

Nigeria has decided to split the OPL 245 oil block into four separate blocks to be assigned to Eni and Shell, ending nearly three decades of legal disputes surrounding one of the country’s most prolific fields.

The move paves the way for development of a field that has remained undeveloped despite estimated recoverable reserves of around 9 billion barrels. According to a source close to the matter cited by Reuters, final agreements are due to be signed as early as this week, allowing long-delayed operations to proceed.

The financial stakes for Abuja are significant. A study by Global Witness found that a controversial 2011 deal led to 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% of oil revenues, compared with 41% under the original terms. Global Witness said the gap was equivalent to nearly twice the combined annual budgets for health and education.

The division of the block aims 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.

A saga marked by litigation and corruption allegations

Over time, OPL 245 became a symbol of what was widely described as the largest corruption scandal in Nigeria’s oil sector. The block was initially awarded in 1998 to Malabu Oil, a company linked to Dan Etete, who served as oil minister under the regime of Sani Abacha.

A few years later, Shell 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 a $1.3 billion deal. Italian prosecutors later alleged that most of the money was diverted to political figures 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.

Since then, Abuja has sought a resolution that would allow it to develop the asset without reopening past disputes. The solution adopted involves splitting OPL 245 into four separate blocks to be assigned to Eni and Shell.

The restructuring does not erase past losses or the scale of the scandal, but it brings years of institutional gridlock to a close. The success of the relaunch will depend on the government’s ability to establish new contractual terms and ensure oversight aligns with current governance standards.

Olivier de Souza