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objection against Malabu’s claim that its rights and interests in OPL 245 remained valid and subsisting, and had not been revoked by the federal government of Nigeria.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.
In the Beginning
In 1998, Malabu Oil and Gas Ltd received OPL 245 from 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. Malabu regained ownership of the block in 2006 through an out-of-court settlement with the federal government after a lengthy legal dispute. Shell initiated arbitration against Nigeria in response.
When President Goodluck Jonathan took office in 2010, he upheld the consent judgment, which led to Shell and Eni agreeing to buy the oil block from Malabu for $1.1 billion. The oil companies also paid a $210 million signature bonus to the Nigerian federal government. Nevertheless, the deal faced criticism from an international campaign that alleged corruption in the OPL 245 transaction, claiming that bribes were paid to Nigerian government officials.
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.
Legal Battle
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 (Senior Partner at Aluko & Oyebode, appearing with Inyene Robert, Partner and Ife Omotola, Senior Associate), 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.
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, 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 (Senior Partner, R. O. Atabo, SAN & Co), told the Appeal Court that there was no denial of fair hearing as alleged by the appellant.
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 Court, 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 Court 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.
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