...as Eni, Shell begin work to unlock billions of trapped barrels of oil
Exploration and production activities are about to commence at one of Nigeria’s biggest oil fields, OPL 245, popularly known around the world as Malabu, after about three decades of inactivity caused by a vicious ownership crisis between contending parties, Business Hallmark can report.
The new operators of the deep-water field, which is rich in crude oil and natural gas, Eni SPA, Shell Petroleum and the Nigerian National Petroleum Company Limited (NNPCL), it was learnt at the weekend, have started mobilizing human and material resources to site in an effort to restart operations at the abandoned field.
According to BH findings, a Final Investment Decision (FID) will soon be announced on the Zabazaba–Etan development, a major project in the expanse oil block capable of ushering Nigeria’s into economic prosperity by adding about 200,000 barrels per day to it’s oil production capacity.
It would be recalled that the Federal Government under the leadership of late Head of State, Gen. Sanni Abacha, had on April 29th, 1998, awarded several oil blocks to indigenous companies under the Indigenous Concession Programme (ICP).
While South Atlantic Petroleum, a firm owned by former Defence Minister, General Theophilus Danjuma, was awarded OPL 246, Mrs. Folorunsho Alakija’s Famfa Oil Ltd. was awarded OPL 216; Heritage Oil got OPL 247, while Zebra Energy secured the licence for OPL 248.
Other local firms owned by influential Nigerian also secured oil licences, with the most viable block, OPL 245, an oil block that covers a defined deep-water offshore area of over 1,000 mbsl (Minimum Basic Setback Line) 150 kilometres off the Niger Delta going to Malabu Oil and Gas owned by the Abacha family.
On Eyes on OPL 245
However, the huge expectations from OPL 245 were short lived as it became embroiled in legal disputes and international arbitrations between the parties laying claim to the block, namely Malabu, Eni S.p.A, Shell, and the Federal Government from 1998 to March 2026, when the protracted dispute was finally resolved by the current administration. These disputes hindered exploration activities in preparation for bringing the oilfield into production.
The news of the successful conclusion of the settlement agreement was announced on March 6th, 2026 at the end of a meeting between the Federal Government, led by President Bola Tinubu and his Special Adviser on Energy, Olu Verheijen on one side, and Eni’s management led by its chief executive officer, Claudio Descalzi, chief operating officer, Guido Brusco, Head of Sub-Saharan Region, Mario Bello, and the Managing Director of Eni’s arm in Nigeria, the Nigerian Agip Exploration Limited (NAEL), Fabrizio Bolondi.
Speaking at the end of the meeting, President Tinubu described the agreement as a strategic milestone in Nigeria’s economic reform agenda and reaffirmed his administration’s commitment to resolving legacy disputes, restoring investor confidence, and ensuring that Nigeria’s natural resources deliver sustainable value to the Nigerian people.
“This resolution 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”, President Tinubu said.
Also speaking, the presidential adviser on energy, Olu Arowolo-Verheijen, said the settlement represents a significant improvement on the 2011 Resolution Agreement, reflecting the policy framework established under the Petroleum Industry Act (PIA) and the administration’s broader fiscal and governance reforms in the energy sector.
“The revised terms strike a balanced outcome providing investors with the clarity and predictability required to proceed with major deep-water investments, while ensuring stronger value accretion and safeguards for the Federation.
“By resolving the OPL 245 dispute, the federal government has removed one of the most prominent legacy risks in Nigeria’s upstream sector and reinforced its commitment to predictable regulation, transparent governance, and commercially viable investment frameworks”, Arowolo-Verjeihen said.
Earlier Efforts
The Federal Government had earlier reached a settlement with Shell. Also, another party in the industrial feud, Malabu, is deemed to have been fully compensated for OPL 245 with the payment of the $1.3 billion (price plus the signature bonus) provided by Eni and Shell at a Resolution Agreement in April 2011.
The new settlement, BH findings revealed, included the breaking of OPL 245 oil block into four, two development licenses, Petroleum Mining Leases (PML) 102 and 103 and two exploration licenses, Petroleum Prospecting Leases (PPL) 2011 and 2012.
The four licenses have Eni as operator and the Nigerian National Petroleum Company Limited (NNPC) and Shell Nigeria Exploration and Production Company Limited (SNEPCO) as partners.
Our correspondent reliably gathered that Eni was deliberately chosen as the operator owing to its deep involvement and extent of exploratory works in the field after it was brought in by Malabu Oil as partner earlier in the day.
The firm, it was learnt, had entrusted the analysis of geological, financial and legal aspects of the field to a team of over 80 foreign and in-house experts and consultants, who had delivered on the assignment, and was ready to commence drilling activities when the Federal Government revoked the licence it acquired from Malabu and re-awarded it to Shell Nigeria.
While speaking to our correspondent at the weekend, a reliable source in Eni said the conversion to PML 102 and PML 103 will help facilitate the development of the already explored Zabazaba and Etan fields, while exploration works will expand to acreages that have not been fully explored.
“Eni plans to apply its expertise in fast-track project development to move these projects forward. The Etan-Zabazaba project is based on reserves estimated at approximately 500 MMbbl and will rely on a floating production system with a capacity of about 200,000 kbopd through an FPSO processing facility.
“In addition to the development licenses, the exploration areas PPL 2011 and PPL 2012 linked to the OPL 245 oil block have been identified as holding significant potential and will be developed in synergy with future Zabazaba-Etan infrastructure”, the Eni sourcez capacity expected to grow by about 150,000 to 200,000 barrels per day, the nation’s economy is expected to reap exponentially from it.
“The expected gains are huge. The FID alone for the development of the block will be several billions of naira, possibly topping $7billion to $10billion like the Bonga projects. This huge inflow in expense costs will lift the nation’s economy for sure.
“And we have not yet mentioned the extra revenues from oil and gas produced daily from the field. In the next 18 moths to two years, we should expect full production at the field. The president has done well. He should be praised as Nigeria will be better for it.
“At the current budget estimate of N1,400 per dollar and $64 per barrel, that is an extra daily income of $12.8million (N17.92billion). Yet, we have not added proceeds from natural gas that is in abundance in the field”, said Dr. Bernard Iloh, an oil and gas expert.