The Malabu OPL 245 affair began in April 1998, during the military government of General Sani Abacha. The block, one of Nigeria’s most valuable deep-water offshore assets, was awarded to Malabu Oil & Gas Ltd, a company incorporated shortly before the award. From the beginning, the licence carried a burden that would follow it for decades. Malabu was linked to Dan Etete, who was Nigeria’s petroleum minister at the time, and to interests alleged to be close to the Abacha circle.
That connection made the award more than an ordinary licensing decision. It raised a central public question. How could a company linked to a serving petroleum minister benefit from a major national oil asset under a government he served? Courts and investigators later examined different parts of that history, and the precise ownership structure of Malabu remained disputed in legal records. Yet the historical problem was already visible. Public authority and private benefit appeared dangerously close.
OPL 245 was located about 150 kilometres off the Niger Delta. Its scale made it commercially attractive, while its origins made it politically explosive. What followed was not a clean journey from exploration to production. It became a long contest of revocation, reallocation, settlement, allegation, prosecution, failed claims and eventual restructuring.
Revocation, Reallocation and the Road to Settlement
After Nigeria returned to civilian rule, President Olusegun Obasanjo’s administration revoked Malabu’s licence in 2001. The block was later allocated to Shell Nigeria Ultra Deep Limited. That decision did not settle the matter. Instead, it opened another phase of dispute. Malabu challenged the loss of the asset, Shell sought protection of its interest, and the Nigerian government became trapped between the consequences of the original award and the consequences of attempting to undo it.
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The dispute dragged through the 2000s until the Goodluck Jonathan administration pursued a resolution in 2011. The settlement arrangement involved the Federal Government of Nigeria, Malabu, Shell interests and Eni’s Nigerian Agip Exploration. Under the arrangement, Malabu relinquished its claims, while Shell and Eni interests moved toward control of the block.
The transaction is often described as a $1.3 billion deal. That figure included about $1.092 billion connected to Malabu’s relinquishment of claims and a separate signature-bonus-related payment of about $207.96 million. The public controversy centred on what happened to the money connected to Malabu after the settlement structure was activated. Prosecutors and campaigners alleged that large parts of the funds were diverted to politicians, officials and intermediaries. Shell, Eni and their executives denied wrongdoing.
The structure of the 2011 settlement gave the transaction a formal government channel, but it did not remove the deeper concern. A company linked to a former petroleum minister had received enormous value from an asset originally awarded under military rule, and the Nigerian state was left trying to resolve a problem created by earlier opaque decision-making.
The Courtroom Battles Across Borders
The Malabu scandal became international because the money, companies and legal disputes crossed borders. Italy became the main criminal arena. Prosecutors alleged corruption in the 2011 acquisition of OPL 245 and brought proceedings against Eni, Shell and several individuals, including senior executives. The case was widely described as one of the largest corruption trials in the oil industry.
In March 2021, a Milan court acquitted Eni, Shell and other defendants. In July 2022, the prosecution waived its appeal, making the acquittals final under Italian law. That outcome did not erase the political controversy around OPL 245, but it meant the central criminal allegations were not proved to the legal standard required in that court.
Nigeria also pursued civil actions. In Italian courts, Nigeria’s compensation efforts failed or were withdrawn. In November 2023, Shell confirmed that Nigeria had withdrawn civil claims totalling $1.1 billion against it in relation to OPL 245, bringing the Italian legal actions against Shell to an end.
Britain became another important legal battleground, but in a different way. Nigeria sued JPMorgan Chase over the bank’s role in transferring funds connected to the 2011 settlement. The claim was a civil banking case, not a criminal trial against Shell or Eni. Nigeria sought $1.7 billion, arguing that the bank should not have processed the transfers. In June 2022, the London High Court ruled against Nigeria and found that JPMorgan had not breached its relevant legal duty.
Nigeria’s domestic prosecutions also weakened. In 2024, a Nigerian court discharged former Attorney-General Mohammed Adoke and six others after finding that the EFCC had not substantiated the allegations before the court. The ruling was another major setback for the prosecutorial side of the Malabu story.
What the Courts Did, and Did Not, Decide
The courtroom record matters because the Malabu story has often been told in extremes. One version presents the affair as if the full bribery allegation had been finally proved in court. Another version treats the acquittals as if they made the entire history clean. Both readings miss the harder truth.
The courts did not finally convict Shell, Eni or their executives over the main bribery allegations. Nigeria also lost or withdrew major claims in foreign courts. That is an important legal fact.
But the absence of final convictions does not make the public concern imaginary. The original 1998 award remains deeply problematic because of the link between Malabu and Dan Etete, who was petroleum minister at the time. The 2011 settlement remains historically troubling because a company tied to a former minister received huge value from a national oil asset originally awarded in highly controversial circumstances.
The Malabu affair is therefore best understood as a scandal of origin, structure and governance. It is not a story where every allegation ended in conviction. It is a story of how weak safeguards, opaque licensing and politically exposed interests can trap a national asset in suspicion and litigation for nearly three decades.
The 2026 Settlement and the Return of OPL 245
In 2026, the Tinubu administration moved to resolve the long-running deadlock. Reuters reported that Nigeria had broken up OPL 245 into four new assets under a deal involving Eni and Shell. Eni later said the agreement of 5 March 2026 included the settlement of claims relating to OPL 245 and the discontinuation of arbitration at the International Centre for Settlement of Investment Disputes.
Under the new structure, the old licence was converted into two Petroleum Mining Leases, PML 102 and PML 103, and two Petroleum Prospecting Leases, PPL 2011 and PPL 2012. Nigerian Agip Exploration was named as operator, alongside Nigerian National Petroleum Company Limited and Shell Nigeria Exploration and Production Company.
Nigeria’s Attorney-General, Lateef Fagbemi, defended the settlement. The government said Nigeria faced potential liability exceeding $2 billion in damages and costs if the arbitration continued. It also argued that the arbitration focused on Nigeria’s delay or refusal to convert OPL 245 into an Oil Mining Lease, not on internal ownership disputes within Malabu.
The government’s argument was economic and legal. OPL 245 had remained undeveloped for decades, and continued litigation could expose Nigeria to further losses. The settlement was therefore presented as a practical way to unlock a stranded asset.
Yet the moral and institutional questions remain. A settlement may allow development to begin, but it does not rewrite the troubled history of how the asset became disputed in the first place.
Why Malabu Still Matters
Malabu matters because it shows how a single flawed allocation can outlive several governments. The award was made under military rule. It was revoked under civilian rule. It was settled under another administration. It was litigated across Europe and Nigeria. It returned in 2026 as part of a new oil-sector bargain.
For Nigeria, the lesson is larger than one oil block. Natural resources can become engines of development only when public trust is protected. When licensing decisions are opaque, when politically exposed persons are close to private beneficiaries, and when institutions fail to prevent conflicts of interest, national assets can become legal battlefields rather than sources of public value.
The Malabu affair also shows the limits of courtroom resolution. Courts can decide whether specific charges are proved, whether a bank breached a duty, or whether a civil claim succeeds. They cannot fully repair the public damage caused by years of secrecy, suspicion and lost opportunity.
Conclusion
The Malabu OPL 245 scandal is one of the clearest examples of how Nigeria’s oil wealth has often been weakened by governance failure. The block was valuable. The process around it was contested. The legal battles were long. The public trust lost along the way was even greater.
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The 2026 restructuring may finally move OPL 245 toward production after nearly three decades of paralysis. If that happens, Nigeria may recover some economic value from an asset long trapped in dispute. But historically, the scandal has already left its mark.
OPL 245 is not merely a story about Shell, Eni, Malabu or Dan Etete. It is a warning about what happens when national resources are allocated without enough transparency, when public office and private interest appear to meet, and when weak institutions leave future governments to pay for yesterday’s decisions.
Author’s Note
The Malabu OPL 245 affair reminds Nigeria that the cost of opaque governance is not measured only in court fees, arbitration claims or lost production. It is measured in the erosion of public confidence, the weakening of institutions and the decades of delay that follow when national assets are handled without transparency. The courts did not prove the broadest criminal allegations against Shell and Eni, but the historical stain remains in the original award, the disputed settlement structure and the long failure to protect a valuable public resource from suspicion and controversy.
References
Reuters, “Nigeria splits OPL 245 oilfield into four blocks under deal with Eni, Shell,” 2 March 2026.
Eni, “OPL 245 historic agreement: four new deepwater licences,” 2026.
Eni, “OPL 245: Eni’s position on the Nigeria case.”
The State House, Abuja, “Those opposed to the resolution of OPL 245 dispute pursuing selfish not patriotic interests,” 26 March 2026.
Federal Republic of Nigeria v JPMorgan Chase Bank, High Court of Justice, Business and Property Courts of England and Wales, 14 June 2022.
Reuters, “Italian court acquits Eni and Shell in Nigerian corruption case,” 18 March 2021.
Reuters, “Shell confirms Nigeria withdrawal of oilfield claim,” 17 November 2023.
Premium Times, “Malabu Oil Deal: Why court discharged ex-AGF Adoke, six others,” 31 March 2024.
Reuters, “Italy’s top court clears Milan prosecutors in Eni Nigeria case,” 18 June 2026.
