OPL 245 Crisis Deepens As Malabu Sues Tinubu Govt, Seeks N1trn Damages Over Controversial Oil Block Split

Oil Giant Challenges Tinubu Administration’s Deepwater Asset Restructuring As Legal Battle Over Controversial Oil Block Reignites

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By Angela Udende / May 26, 2026

ABUJA, NIGERIA — The long-running and controversial dispute surrounding Nigeria’s highly lucrative Oil Prospecting License 245 (OPL 245) has resurfaced dramatically at the Federal High Court in Abuja, as Malabu Oil & Gas Limited instituted a fresh legal action against the Federal Government over the alleged unlawful division of the oil block into four separate assets.

In the fresh suit marked FHC/ABJ/CS/871/2026, the indigenous oil company is asking the court to nullify the Federal Government’s recent restructuring of the oil asset, restrain further interference with its interests, and award damages of N1 trillion for what it describes as unconstitutional and illegal encroachment on its proprietary rights.

The suit, filed on Monday, May 25, 2026, by a legal team led by senior advocate R.O. Atabo (SAN), directly challenges actions allegedly taken by the Presidency and top federal authorities under the Petroleum Industry Act (PIA) 2021.

Presidency, AGF, Petroleum Minister Named In Suit

Malabu Oil & Gas named the President of Nigeria, the Attorney-General of the Federation, and the Minister of Petroleum Resources as the first, second and third defendants respectively.

At the centre of the dispute is the Federal Government’s reported decision to split OPL 245 into four operational assets to be managed by:

Shell Nigeria Ultra-Deep Limited
Shell Nigeria Exploration Production Company Ltd
Nigerian Agip Exploration Company Ltd
Nigerian National Petroleum Company (NNPC) Limited

According to court filings obtained by A1NEWS International, Malabu argued that the Federal Government acted outside its constitutional and statutory powers by reallocating interests in the oil block while litigation concerning ownership rights remains unresolved before multiple courts.

Malabu Alleges Illegal Executive Action

In one of its principal reliefs before the court, the company prayed for:

“A declaration that the executive actions of the 1st and 3rd Respondents… splitting OPL 245 into Four separate Assets… whilst Applicant’s rights and interests in OPL 245 are still subsisting, amount to illegal and unlawful exercise of executive powers.”

The company further argued that neither the Petroleum Industry Act nor any existing law authorises the government to create overlapping or concurrent ownership interests over an oil block whose ownership remains under judicial contest.

Malabu is also seeking an order nullifying the alleged conversion of OPL 245 to Oil Mining Lease (OML) 245 during the pendency of multiple suits already before the Federal High Court, Court of Appeal and Supreme Court.

Company Demands N1 Trillion Compensation

In addition to declaratory and injunctive reliefs, the company is demanding N1 trillion in damages jointly and severally against the defendants.

The suit described the government’s actions as:

“Ultra vires the provisions of the Petroleum Industry Act, 2021.”

The massive compensation claim is likely to deepen concerns over the financial and legal implications of the OPL 245 saga, which has remained one of Nigeria’s most controversial oil disputes for over two decades.

Mohammed Sani Abacha Details Malabu’s Ownership Claims

In a sworn affidavit accompanying the suit, shareholder and director Alhaji Mohammed Sani Abacha traced the origins of Malabu’s claim to the oil block back to April 29, 1998, when the company was allegedly granted OPLs 214 and 245 by the then Minister of Petroleum Resources.

According to him, Malabu fulfilled all financial obligations tied to the allocation, including payment of a signature bonus exceeding $2 million, before the licence was revoked in 2001.

The revocation later triggered litigation and negotiations that culminated in an out-of-court settlement in 2006.

Abacha maintained that one of the critical terms of the settlement required the Federal Government to reallocate OPL 245 to Malabu.

He stated:

“In pursuant of and in perfection of the out-of-court settlement agreement, the 1st Respondent by a letter dated July 2, 2010, re-allocated OPL 245 to the Applicant.”
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He argued that the reallocation restored Malabu’s “exclusive possession” of the oil block and that such rights have never been lawfully extinguished.

Government Accused Of Excluding Malabu From New Agreement

Despite pending court actions, Malabu alleged that the Federal Government proceeded in February 2026 to execute a fresh “Block 245 Resolution Agreement” involving multinational oil companies and NNPC without involving the company.

Abacha accused the government of deliberately excluding Malabu from negotiations despite knowledge of its pending legal claims.

He stated:

“The Respondents willfully and deliberately refused to make the Applicant a party to the Block 245 Resolution Agreement, thus violating with impunity the rights and interests of the Applicant.”

The company insisted that neither Malabu nor any of its registered directors surrendered or relinquished rights to the oil block.

Tinubu Administration Defends Deepwater Reforms

The lawsuit also referenced public statements made by senior government officials defending the restructuring arrangement.

Presidential Adviser on Energy, Mrs. Olu Arowolo-Verheijen, reportedly described the deal as a major reform aligned with the Petroleum Industry Act and Nigeria’s deepwater investment framework.

According to the affidavit, she stated:

“The reforms… have already contributed to renewed interest and significant capital inflows into Nigeria’s oil and gas sector.”

Similarly, NNPC Group Chief Executive Officer Bayo Ojulari reportedly hailed the agreement as critical to unlocking the Zabazaba-Etan deepwater project capable of adding approximately 150,000 barrels per day to Nigeria’s oil production.

However, Malabu argued that such pronouncements reinforced fears that government officials had already concluded plans to permanently transfer the disputed asset despite unresolved legal proceedings.

Multiple Appeals Still Pending

A major plank of Malabu’s argument is that several suits and appeals relating to OPL 245 remain active before Nigerian courts.

The company maintained that government authorities acted recklessly by restructuring and reallocating the oil block while appeals were pending before both the Court of Appeal and the Supreme Court.

Legal observers say the case could reopen scrutiny of one of Nigeria’s most internationally litigated oil transactions involving billions of dollars, foreign oil giants, political influence, and questions surrounding regulatory transparency.

Fresh Questions Over Nigeria’s Oil Governance

The renewed legal confrontation comes at a time Nigeria is aggressively pursuing foreign investment in the energy sector under reforms introduced by the Petroleum Industry Act.

Analysts warn that prolonged disputes over ownership rights and government powers could affect investor confidence, especially in deepwater oil assets requiring long-term capital commitments.

The matter is scheduled for hearing on June 11, 2026, at the Federal High Court in Abuja.

With Malabu demanding N1 trillion in damages and challenging the Federal Government’s authority under the Petroleum Industry Act, the latest legal battle over OPL 245 threatens to reopen one of Nigeria’s most contentious oil controversies.

As the court prepares to hear the matter, the dispute is expected to test the limits of executive powers in the management of strategic national assets while raising broader questions about transparency, investor confidence, and the future of Nigeria’s oil sector reforms.