Nigeria’s Attorney General has warned of consequences of a long-running dispute with oil major Eni SpA and Shell Plc which is preventing the companies to finally develop a prized deepwater oil license.
Investigations and lawsuits relating to the energy giants’ acquisition of the permit 12 years ago should be halted so Nigeriancan “take advantage of the fast-disappearing opportunities in the global oil exploration industry,” Attorney General Abubakar Malami wrote in a letter to President Muhammadu Buhari dated February 6, 2023, and seen by Bloomberg.
Delays to the development of the block have had “negative economic consequences” for Nigeria, he said.
While Buhari’s administration has alleged that much of the $1.1 billion paid by Eni and Shell to the Nigerian government for the rights to Oil Prospecting License 245 was subsequently diverted to bribes and kickbacks, it has suffered high-profile defeats in courts in Italy and the UK. Eni initiated arbitration proceedings against Nigeria in 2020, accusing the government of breaching its obligations by refusing to convert the permit into one that allows the production of hydrocarbons.
Malami advised Buhari to direct the termination of a lawsuit brought against the two companies in Nigeria by the nation’s anti-corruption agency and of all investigations concerning the license, according to the letter.
The oil industry regulator should “expedite conversion of OPL 245,” said Malami, who also serves as justice minister.
After the firms and serving and former executives were acquitted of corruption charges in Milan, Buhari – who doubles as Nigeria’s oil minister – consented in May 2022 to the conversion of the permit pending the conclusion of all disputes between the parties, according to Malami’s letter.
Malami’s spokesman declined to comment on the contents of the letter. Eni also declined to comment. Spokespeople for Buhari, the Nigerian Upstream Petroleum Regulatory Commission and the Economic and Financial Crimes Commission didn’t immediately respond to requests for comment.
Shell has “always maintained that the 2011 settlement related to OPL 245 was legal,” a company spokeswoman said by email.
Buhari is due to leave office at the end of May and be replaced by his ally Bola Tinubu, who won a presidential election held in February.
The government’s defense against Eni’s arbitration claim “becomes doubtful particularly when viewed in the context of serial losses already recorded,” while the Nigerian suit does not offer “any prospect of success,” Malami said in the letter.