According to people with direct knowledge of the situation who spoke to Reuters, the Italian oil central Eni (ENI.MI) has temporarily stopped arbitration over an oilfield issue with the Nigerian government to buy time to talk about converting a prospecting license to a production license.
Eni affirmed that the arbitration about the OPL 245 oilfield—possibly the most significant oil block in the nation—has been suspended at the World Bank’s dispute resolution body.
“Eni … has agreed with the Federal Government of Nigeria to mutually and temporarily suspend the arbitration proceedings in order to discuss with the government the necessary steps for achieving the conversion of the licence from prospecting into mining (extraction),” a spokesperson for Eni told Reuters.
The action was taken only a few days after Nigeria began to withdraw $1.1 billion in civil claims against Eni stemming from suspicions of wrongdoing in the OPL 245 deal.
An oil prospecting license (OPL) permits a business to search for oil; however, to produce and export oil, the license must be converted to an oil mining license (OML) if recoverable oil is discovered.
According to the sources, Eni requested to stop the arbitration on November 16, a few days after the procedures began. They also stated that Nigeria is now looking for better terms for the block license than what has been discussed up to this point.
The Nigerian federal government did not immediately answer a request for comment from Reuters.
Oil Prospecting Licence (OPL) 245 is an offshore field for which Eni and Shell (SHEL.L) were granted rights in 2011. However, the field has never been used because it has been the focus of several ongoing legal challenges, which are gradually coming to a close.
A Milan appeals court upheld Shell’s and Eni’s CEO’s acquittal in 2022 in a corruption case involving the purchase of OPL 245.
On October 15, with the opening of a preliminary hearing in a Milan court on alleged fraud over a failed 2019 Eni tanker sale, the first indications appeared that Eni and the Nigerian government were progressing towards resolving their outstanding disagreements.
Subsequently, Eni retracted its fraudulent case against Oando (OANDO.LG), a Nigerian corporation, and its former CEO, Boyo Omamofe.
An Italian judge dismissed the cases against all defendants during a hearing earlier in November, citing the possibility that the crimes were committed overseas and outside his jurisdiction.
Eni had agreed to sell Oando, its Nigerian onshore unit, on September 4. TLocal authorities and regulators must approve the agreement