The Federal Government plans to revive production at Zabazaba oil field.
This is according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Over the weekend, Nigeria Agip Oil Company Limited (NAOC) executives, led by Managing Director Mr. Fabrizio Bolondi, visited Engr. Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The purpose was to resume discussions on Nigeria’s deepwater oil block OPL 245, specifically the Zabazaba Field, in line with the Federal Government’s initiative to develop the oil-rich field for the benefit of Nigerians.
NUPRC revealed that steps are being taken to address all legal matters related to the Zabazaba oil field.
The aim is to facilitate the resolution of these issues and move forward with the conversion process, converting the oil prospecting license into a mining lease for commercial oil development and production.
The anticipated outcome is the Zabazaba field will contribute 150,000 barrels of oil per day, significantly enhancing Nigeria’s overall oil production.
The Backstory
In 1998, Malabu Oil and Gas secured an Oil Prospecting Lease for Oil Block 245 but only paid $2 million of the expected $20 million. Shell Nigeria Ultra Deep Limited (SNUD) acquired a 40% stake, leading to the 2001 revocation of the lease.
ExxonMobil and SNUD won a fresh bid in 2002. Legal battles ensued, resulting in the validation of Malabu’s rights in 2005. SNUD sought compensation at the International Centre for Settlement of Investment Disputes (ICSID, settling in 2011 with a $1.09 billion payment.
A 2011 Resolution Agreement with FGN, SNUD, and Eni governs Block 245. In 2020, a UK court rejected a $1.1 billion case against Shell and Eni over bribery allegations.
Ongoing cases hint at the potential involvement of high-profile Nigerian officials. In July 2020, Italian prosecutors sought convictions for ENI executives in the OPL-245 license bribery case.
What you should know
Note that in a September 2023 statement sent to Nairametrics, the Federal Government indicated that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) concluded a series of strategic engagements with fifteen (15) leading international and independent Oil and Gas Companies operating in Nigeria. NAOC is one of these leading companies.
The FG also noted that the talks with these investors led to significant investment opportunities with an estimated $55.2 billion in investments projected by 2030, of which $13.5 billion is expected to be invested by these companies within a couple of months.
During these consultations, participating operators shared insights into the challenges and barriers affecting their investment strategies and the swift rollout of planned projects.
Collectively, they also pinpointed the key enablers required that will ensure the delivery of 2.1 million barrels by December 2024, positioning Nigeria well ahead of President Tinubu’s campaign promise of 2.6 million barrels by 2027.
