The Nigeria OPL-245 settlement reached on 5 March 2026 marks a significant step forward for Nigeria’s oil and gas sector. After more than 15 years of legal disputes across multiple jurisdictions, the long-delayed offshore block has finally been cleared for development.
For much of that period, the project remained frozen by court cases and arbitration proceedings stretching from Europe to Africa, leaving one of Nigeria’s most valuable deepwater assets effectively dormant. The Nigeria OPL-245 settlementnow clears the path for development of the Zabazaba and Etan fields and signals a renewed push to unlock Nigeria’s offshore energy potential.
For the administration of Bola Ahmed Tinubu, the Nigeria OPL-245 settlement is also intended to demonstrate that Nigeria’s energy sector is entering a more stable and rules-based phase under the framework of the Petroleum Industry Act.
The mechanics behind the Nigeria OPL-245 settlement
The Nigeria OPL-245 settlement restructures the controversial offshore licence using the regulatory architecture created by the Petroleum Industry Act.
The restructuring also follows the NUPRC regulatory framework, implemented by the Nigerian Upstream Petroleum Regulatory Commission. The framework governs how legacy oil licences are converted, split, and approved for development under the Petroleum Industry Act, providing the regulatory clarity that helped unlock the Nigeria OPL-245 settlement.
Rather than maintaining the single disputed licence structure, regulators have reorganised the asset into four separate licences, allowing development and exploration to move forward simultaneously.
Asset restructuring
PML 102 and PML 103
These Petroleum Mining Leases focus on the immediate development of the Zabazaba and Etan deepwater fields, which contain the most commercially viable reserves within the block.
PPL 2011 and PPL 2012
Two Petroleum Prospecting Leases will support further exploration across the wider acreage, ensuring that additional hydrocarbon resources can be identified while production begins.
Industry officials say the restructuring was designed specifically to accelerate project timelines following the Nigeria OPL-245 settlement, preventing further delays that previously stalled development.
Operating structure
Under the agreement, the project will be developed through a joint partnership between:
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Eni, which will act as operator
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Shell through its deepwater subsidiary SNEPCo
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NNPC Limited
The Nigeria OPL-245 settlement also brings an end to all pending arbitration cases previously filed at the International Centre for Settlement of Investment Disputes.
Crucially, the settlement includes a mutual release of all liabilities between the parties, a standard legal clause that effectively removes the risk of future litigation linked to the dispute. Energy lawyers note that this provision is particularly important because it gives international boards of directors the confidence to approve major capital investments tied to the project.
Economic impact of the Nigeria OPL-245 settlement
The scale of the resource explains why the Nigeria OPL-245 settlement is being closely watched across the global energy industry.
The block is believed to contain up to 9 billion barrels of oil equivalent, making it one of the largest undeveloped offshore assets in Africa.
Production boost
The Zabazaba-Etan development is expected to deliver approximately:
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150,000 barrels per day of crude oil once production ramps up
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Additional condensate output from the deepwater reservoirs
For Nigeria, the production boost associated with the Nigeria OPL-245 settlement could play a role in stabilising national output after several years of underinvestment in the upstream sector.
Gas development
The project will also produce around 200 million standard cubic feet of gas per day at peak output.
This gas will likely support the export operations of Nigeria LNG while advancing Nigeria’s national “Decade of Gas”policy, which aims to expand domestic gas utilisation and export capacity.
Investment inflow
Officials in the energy ministry believe the Nigeria OPL-245 settlement could help attract up to $10 billion in new upstream investment, particularly as Nigeria prepares for the 2025–2026 licensing rounds.
For many international energy companies, the settlement removes a major legal uncertainty that had previously discouraged long-term commitments in Nigeria’s offshore sector.
Why OPL-245 became Africa’s most controversial oil block
Before the Nigeria OPL-245 settlement, the licence was widely known as the “Malabu block.”
The licence was originally awarded in 1998 to a company called Malabu Oil and Gas. Over the years, the block became entangled in a series of international corruption investigations connected to a 2011 acquisition deal involving major oil companies.
Legal proceedings unfolded in multiple jurisdictions, including Italy and the United Kingdom. While several high-profile cases eventually collapsed or ended in acquittals, the prolonged litigation prevented development of the block for more than a decade.
The Nigeria OPL-245 settlement effectively closes this chapter. The agreement includes a comprehensive mutual release of claims and liabilities, which removes the lingering legal exposure that had made investors wary of the project.
For Nigeria’s oil industry, resolving the Malabu dispute through the Nigeria OPL-245 settlement represents a deliberate effort to move beyond one of the most controversial episodes in its petroleum history.
A governance pivot for Nigeria’s oil sector
Beyond the economic impact, analysts say the Nigeria OPL-245 settlement carries important signals about Nigeria’s regulatory direction.
Restoring investor confidence
By resolving one of the most complex legal disputes in the global oil industry, Nigeria is attempting to demonstrate that the regulatory environment created by the Petroleum Industry Act can handle legacy issues transparently.
The Nigeria OPL-245 settlement therefore serves as a test case for whether Nigeria can rebuild investor confidence in its upstream sector.
A shift toward production
Another policy signal embedded in the Nigeria OPL-245 settlement is a move away from traditional licensing models that prioritised large signature bonuses.
Instead, regulators are placing greater emphasis on technical capability and speed of development, effectively prioritising companies that can bring oil and gas resources into production more quickly.
What happens next after the Nigeria OPL-245 settlement
The next major milestone following the Nigeria OPL-245 settlement will be the Final Investment Decision (FID) for the Zabazaba-Etan project.
Industry sources expect this decision to be taken by the end of the third quarter of 2026.
Once approved, the project is expected to trigger substantial procurement activity across Nigeria’s oil services sector, including contracts for:
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subsea engineering firms
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offshore installation vessels
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fabrication yards building platform components
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logistics providers supporting deepwater operations
Importantly, the project will also serve as a major test of the local content rules enforced by the Nigerian Content Development and Monitoring Board.
Deepwater developments have historically faced challenges in meeting Nigerian content targets due to the specialised technology required. The Nigeria OPL-245 settlement therefore places the upcoming Zabazaba-Etan development at the centre of efforts to demonstrate that large offshore projects can comply with Nigeria’s local industry participation guidelines.
If development proceeds on schedule, the Nigeria OPL-245 settlement may ultimately be remembered not just as the end of a complex legal dispute, but as the moment when one of Nigeria’s most controversial oil blocks finally moved from courtroom battles to offshore production.
