The Court of Appeal in Abuja has dismissed Malabu Oil and Gas Ltd’s suit over the disputed $1.3 billion oilfield in Nigeria, Oil Prospecting Licence (OPL) 245, in favor of Nigerian Agip Oil Company.
The Appeal Court set aside a 2020 Federal High Court ruling which had dismissed Agip’s preliminary objection against Malabu’s claim that its rights and interests in OPL 245 remained valid and subsisting, and had not been revoked by the federal government of Nigeria.
Justice H. A. Barka of the Appeal Court dismissed Malabu Oil’s suit for being an “abuse of court process” on May 23, 2025.
This represents the latest development in the much-discussed oil field, which covers a defined deep-water offshore area approximately 150 km off the Niger Delta.
Legal Developments
Following the execution of a “Block 245 Resolution Agreement” on 29 April 2011, Malabu Oil was said to have relinquished its rights and interests in OPL 245.
Agip’s legal team claims that OPL 245 was then allocated to Shell Nigeria Exploration and Production Company Ltd and Nigerian Agip Exploration Ltd (the Appellant), by the Federal Government of Nigeria via a letter of award dated 11 May 2011, pursuant to Section 2 of the Petroleum Act, Cap P10, LFN 2004.
Malabu thereafter commenced a suit at the Federal High Court, contending that its interest in OPL 245 via an earlier allocation by the federal government was subsisting, requiring the nullification of the allocation and/or reallocation of OPL 245 to Agip and Shell.
Agip’s legal team, led by Babatunde Fagbohunlu SAN, filed a preliminary objection, challenging the jurisdiction of the lower court on the following bases:
“The claim as constituted is statute-barred, being a suit against the actions of the Minister of Petroleum Resources, a public officer, for the allocation of an oil prospecting licence, over five years after the said allocation;
“ The action constitutes an abuse of court process, having been commenced by the Malabu (a company) during the pendency of Suit No: FHC/ABJ/CS/206/2017 Malabu Oil & Gas Limited & 2 Ors v Mr Kweku Amafagha & 9 Ors, another action where the Plaintiff contends that the persons who currently appear on its records as shareholders and directors are not entitled to occupy these positions.”
On December 22, 2020, the trial court dismissed Agip’s preliminary objection against Malabu Oil’s case.
Parties then approached the Appeal Court for redress.
The appellant sued Malabu, the federal government, the Minister of Petroleum Resources, Shell Nigeria Ultra-Deep Ltd, Shell Nigeria Exploration and Production Company Ltd, and Chief Dan Etete.
In the Appeal Court filings seen by Nairametrics, Agip urged the appellate court to hold that the lower court’s failure to make a determination on the issues raised in the Appellant’s Preliminary Objection amounted to a breach of the Appellant’s right to a fair hearing and an abuse of court process.
Malabu’s legal team, led by Dr. Reuben Atabo SAN, told the Appeal Court that there was no denial of fair hearing as alleged by the appellant.
Atabo argued that all the judicial decisions cited and relied upon by the appellant on denial of fair hearing were inapplicable to the case.
“I humbly draw my Lords’ attention to the indisputable fact that the defendants at the trial filed their respective notices of preliminary objection which were all heard together and determined in a composite ruling,” Malabu’s team prayed.
What the Appeal Court Said
- Passing judgment on the matter on May 23, Justice Barka observed that the lower court had merely struck out the preliminary objection of Agip without resolving the issues it raised on fair hearing, abuse of court process, and the case being statute-barred.
- The judge, in a unanimous three-man judgment, agreed “that the key issues highlighted by Agip were not pronounced upon or resolved by the lower court.”
- He resolved this issue in favor of Agip.
- The judge also stressed that the court action by Malabu Oil at the lower court was filed outside the three-month timeline stipulated for such matters.
“Once a stipulated period has elapsed, the case is statute barred,” the judge held.
- Barka held that, Malabu, having failed to commence the suit based on the appropriate statute, the case ought to be dismissed for being an abuse of court process.
- He described the appeal by Agip as “meritorious.”
- The judge subsequently held that the decision of Justice Binta Nyako of the Federal High Court, Abuja, as delivered in 2020, and which dismissed Agip’s preliminary objection, is “set aside”.
- The judge also dismissed the suit by Malabu Oil, adding that Agip’s appeal is allowed.
Backstory
In 1998, Malabu Oil and Gas Ltd was awarded OPL 245 by the federal military government.
However, in 2001, former President Olusegun Obasanjo revoked Malabu’s license and reassigned the oil block to Shell without a public bidding process.
After a protracted legal dispute, Malabu regained ownership of the block in 2006 through an out-of-court settlement with the federal government.
In response to these actions, Shell initiated arbitration against Nigeria.
Yet, when President Goodluck Jonathan came into office in 2010, he upheld the consent judgment, seemingly resolving the conflict.
This led to Shell and Eni reaching an agreement to purchase the oil block from Malabu for $1.1 billion.
Additionally, the oil companies paid $210 million as a signature bonus to the Nigerian federal government.
However, the deal soon faced scrutiny from an international campaign, which alleged that the OPL 245 transaction was tainted by corruption, with accusations that the agreement involved bribes to Nigerian government officials.
In October 2024, an Italian court sentenced two Milan prosecutors, Fabio De Pasquale and Sergio Spadaro, to eight months in prison for failing to file documents that could have supported Eni’s defense in an alleged corruption case involving the $1.3 billion oilfield in Nigeria.
What you should know
- In August 2024, Oando PLC announced the successful acquisition of the Nigerian Agip Oil Company (NAOC) from Italian energy giant Eni for a total consideration of $783 million.
- The company confirmed via a press release that the deal was completed, representing a significant milestone in Oando’s long-term strategy.
- The transaction includes reimbursement and consideration for the asset.
