Shell, Eni Take Control Of Huge Oil Field Offshore Nigeria

Royal Dutch Shell PLC (RDSA) and Italy's Eni SpA (ENI) have bought the rights to a potentially prolific deepwater oil field offshore Nigeria, ending a long-running dispute over who would take control of the block from a company with ties to former dictator Sani Abacha.

Shell said Thursday that it and Eni have bought deepwater offshore block OPL 245, although it wasn't prepared to disclose the purchase price. According to local media reports, the oil majors had offered $1.3 billion for the field, which experts believe could hold as much as 9 billion barrels of crude.

The deal also brings to an end a protracted legal spat between Shell and the block's erstwhile owner, Malabu Oil and Gas, a local firm controlled by former minister of petroleum resources Chief Dan Etete, who served in Abacha's cabinet from 1995 to 1998. Shell had initially agreed to partner Malabu amid a drive to boost local investment in the oil and gas sector, but the deal collapsed and the two parties became embroiled in lawsuits.

Shell said Thursday that it hadn't made any payments to Malabu for its share of the license, only to the Nigerian government.

Eni's local subsidiary, Nigeria Agip Exploration, will operate the field, with production to be split on an even basis between the two companies.

Shell, which has long been the biggest foreign oil company in Nigeria, in recent years has taken steps to reduce its onshore footprint in the West African nation, where its operations are beset by sabotage and theft.

-By Alexis Flynn, Dow Jones Newswires; +44 207842 9471, alexis.flynn@dowjones.com

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