A Review of the Nigerian Energy Industry

Shell, Eni buy Nigeria’s controversial OPL 245

7 December 2011, Sweetcrude, ABUJA – Royal Dutch Shell and Eni said on Wednesday they have bought the prospective Nigerian deep offshore oil block OPL 245, bringing to an end a decade of legal disputes over the huge asset.

Shell and Eni will own the block equally but the Italian firm will be the operator. The companies did not confirm how much was paid or the size of reserves but industry experts have said OPL 245 was worth over $1 billion and holds around 9 billion barrels of oil.

The prospect sits near Total’s Akpo block, which has plateau production of around 175,000 barrels of oil equivalent per day.

“The Nigerian government has awarded Agip (Eni) and ourselves OPL 245 on a 50-50 basis. Agip will operate the block,” a Shell spokesman in Nigeria told Reuters. He said the deal was completed in “recent weeks”.

The block was owned by local Nigerian firm Malabu Oil and Gas, which is owned by former Petroleum Minister Dan Etete. Shell has been tussling over the asset with Malabu for 10 years.

Shell and Eni told Reuters all money for the purchase of OPL 245 was paid to the Nigerian government and not to Malabu.

“We confirm that the federal government of Nigeria has allocated the deepwater offshore block OPL 245 jointly to Nigeria Agip Exploration (NAE) and Shell Nigeria E&P Company,” an Eni statement said.

“By the agreement reached NAE will be the operator of the block. No agreement was entered into by NAE and Malabu Oil and Gas,” the statement said. A spokesman for the Nigerian oil ministry declined to comment.

Nigeria is Africa’s largest oil producer and holds the world’s seventh-largest natural gas reserves.

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