OPL 245: Eni seeks World Bank arbitration over oilfield dispute in Nigeria

Eni, an Italian oil and gas company, has filed a request for arbitration against Nigeria at the World Bank’s international centre for settlement of investor disputes (ICSID).

The Italian oil company said it plans to argue that Nigeria’s failure to allow it to exploit an oilfield it acquired with Royal Dutch Shell nearly a decade ago breaches their investment agreement.

According to Reuters, the oil prospecting licence (OPL) 245, an offshore field awarded to the two oil companies (Shell and Eni) in 2011, is the subject of multiple court cases worldwide.

One of the court cases include a criminal case in Milan in which the federal government asked the two oil companies to make an advance payment of $1.092 billion as damages for their involvement in the OPL 245 scandal.

Reuters said the arbitration case, which was registered on October 9, does not give further details and Shell is not a party to the request.

A spokesman for Eni said the request for the arbitration was aimed at protecting its investments and investors, and that it was confident of a satisfactory solution for both parties.

“Specifically, Eni (through its subsidiaries), will contend that Nigeria’s actions violate multiple provisions of the bilateral investment treaty by pursuing a campaign of unfounded claims against Eni and improperly conditioning the conversion of OPL 245 into an oil mining lease (OML),” Eni’s filing to the court said.

According to documents from the US state of Delaware court, Reuters said Eni also filed a request for evidence on October 6 with the court which it (Eni) wants to use in the ICSID arbitration and in the Milan case.

In the Delaware court documents, Eni said it believed “third parties” were behind Nigeria’s lack of action on its request to convert OPL 245 into an oil mining license and on its efforts to claim some $1 billion in damages.

Eni said it was seeking information from Poplar Falls and Drumcliffe Partners both U.S. companies registered in Delaware, on any agreement they have to fund Nigeria’s litigation efforts.

Drumcliffe told Reuters that it was working with the Asset Management Corporation of Nigeria (AMCON) to recover fraudulent payments made in relation to OPL 245 and that it would “oppose Eni’s efforts to the fullest.”

Jim Little, principal of Drumcliffe, said: “What is immediately clear is that Eni is pursuing every avenue to avoid accountability for its role in one of the largest frauds in the history of the oil and gas industry”.