Introduction
On 9 March 2026, the Attorney General of the Federation and Minister of Justice announced the resolution of the long-running dispute over Oil Prospecting Licence (OPL) 245. After about 15 years of litigation across multiple jurisdictions, the matter was concluded through a Consent Arbitral Award reached between the Federal Republic of Nigeria, Shell, and Eni.
By converting a negotiated settlement into a final arbitral award, the parties did more than end litigation. They created an enforceable outcome capable of bringing finality to a dispute that had tied down one of Nigeria’s most significant oil assets. The development also demonstrates the practical value of Section 45 of the Arbitration and Mediation Act (AMA) 2023 in resolving complex commercial and sovereign disputes.
Key Highlights of the OPL 245 Resolution
- A statutory route to finality: The resolution was anchored on Section 45 of the AMA 2023, which allows an arbitral tribunal to record a settlement as an award on agreed terms. This gives the settlement the force of an arbitral award, rather than leaving it as a private agreement.
- Conversion from OPL to OML: A key outcome of the settlement is the conversion of OPL 245 into an Oil Mining Licence (OML) in line with the Petroleum Industry Act (PIA) 2021. This provides the title certainty needed for investment, development, and production.
- De-escalation across jurisdictions: The Federal Government also indicated that related proceedings in London and Milan would be withdrawn, reducing the risk of parallel claims and conflicting decisions.
- Mutual release of claims: The award includes a mutual release mechanism under which the parties waive future claims linked to the 2011 acquisition of the block. This removes lingering liability concerns that could otherwise affect project execution.
- Commercial repositioning of the asset: By moving OPL 245 from prolonged litigation to a settled legal position, the parties have improved the prospects for renewed investment and commercial activity around the asset.
What This Means for Stakeholders
- For sovereign entities and public agencies: properly formalised settlements can deliver outcomes that years of litigation may not achieve.
- For investors and multinational companies: an arbitral award on agreed terms can offer stronger protection than a stand-alone settlement contract.
- For legal advisers and arbitral practitioners: settlement terms should be drafted with enforceability in mind, including alignment with the AMA 2023, the PIA 2021, and cross-border enforcement considerations.
The Road Forward for High-Value Settlements
The OPL 245 resolution makes an important point: in complex disputes, how a settlement is formalised can be just as important as the settlement itself. Parties that convert agreements into enforceable arbitral awards are better placed to secure finality, manage cross-border risk, and reduce the likelihood of future disputes.
For governments, investors, and advisers, the lesson is straightforward: enforceability should form part of settlement strategy from the outset, not be addressed only after terms have been agreed.
For guidance on structuring enforceable settlements, arbitration strategy, and cross-border dispute resolution, contact info@scp-law.com or visit www.scp-law.com.
