9 Billion Barrel Potential Nigerian Oil Field Bought by Shell and Eni

Royal Dutch Shell and Italian-based Eni have just purchased the rights to a potentially huge oil field off the shores of Nigeria, Africa, bringing a long-running political dispute of who would take control of the block to an end.

Shell released a statement on Thursday announcing that they, along with Eni, bought the deepwater block, OPL 245 which is located about 100 miles from French-owned Total’s Akpo field.  The price tag wasn’t included in the statement, but local Nigerian media reports said that the oil companies had offered up $1.3 billion for the field.  Oil experts believe that OPL 245 could house as much as 9 billion barrels of crude.

Until this deal, the oil block was held by local oil firm, Malabu Oil and Gas, controlled by a former minister who is tied to former Nigerian dictator, Sani Abacha.  Shell had been engaged in a legal spat with the local firm, as they initially agreed to partner with Malabu in hopes to boost local investments into the oil and gas industry.  The deal between Shell and Malabu dissolved, and the two companies became involved in lawsuits over the field.

In Shell’s statement, they said that they have not made any payments to Malabu for their share of the block license, and that payments have only gone to the Nigerian government. 

A local subsidiary of Italy’s Eni will be operating OPL 245, with the production slated to be evenly split between Eni and Shell. 

Nigeria, currently an OPEC member nation, produces around 2.4 million barrels of crude oil a day, and remains a top supplier to the United States.