Italy's oil giants, Eni, has suspended arbitration regarding an oilfield dispute with the Nigerian government, buying time to discuss a conversion of the licence from prospecting to mining licence, sources with direct knowledge of the matter told Reuters.
The suspension is coming barely three days after Nigeria withdrew civil claims totalling $1.1 billion against Eni related to allegations of corruption in the OPL 245 deal.
Eni confirmed the suspension of the arbitration regarding OPL 245 oilfield at the World Bank's dispute settlement body.
"Eni ... has agreed with the Federal Government of Nigeria to mutually and temporarily suspend the arbitration proceedings in order to discuss with the government the necessary steps for achieving the conversion of the licence from prospecting into mining (extraction)," an Eni spokesperson told Reuters.
Recall that Bloomberg had reported that Nigeria will waive the claims before Italy's highest court "unconditionally" and "with immediate effect" no later than Nov. 17
The country also "irrevocably" waived the right to any further legal action in Italy against Eni, its affiliates, and current and past officers regarding rights for the field, known as Oil Prospecting License 245, or OPL 245.
Eni confirmed receipt of the letter and said in a statement that it was ready to consider, together with the government of Nigeria, the necessary steps for conversion of the prospective licence to one that will allow the development of the oil block.
According to Bloomberg, the Ministry of Justice was not immediately able to respond to a request for comment.
Operations at the country's oil block have been halted for more than a decade by a series of trials and competing legal claims.
The area is considered to be potentially one of the richest concessions in the country, with recoverable reserves of 560 million barrels, according to Eni's estimates.
Eni's suspension of the World Bank arbitration means the company and its partner Shell Plc can finally begin to develop OPL 245.
Eni, Shell, and some of their former and current managers had already been definitively acquitted last year in a criminal case in Milan, in which they were accused of knowing that much of the $1.1bn they paid to acquire OPL 245 would be distributed as bribes.
Even after that verdict, a civil suit continued, with Nigeria seeking combined compensation of $3.5bn from Eni and Shell, claiming the amount reflected the real value of the licence purchased in 2011 by the two companies.