•OPEC+ agrees modest oil output boost
Emmanuel Addeh in Abuja
Nigeria has broken up the OPL 245 oil block into four new assets to be operated by Eni and Shell, a source told Reuters, potentially settling the future of the field at the centre of one of the oil industry’s biggest historic corruption trials.
The agreement clears the way for the development of OPL 245, one of Nigeria’s biggest deepwater reserves that has remained untapped for almost three decades amid overlapping lawsuits in multiple countries.
The final contracts are expected to be signed starting Monday, said the source familiar with the situation. Nigeria’s government had signalled for years that it was keen to find a solution that would bring the block into production. The source wished to remain anonymous as they are not authorised to comment on government policy before an official announcement.
Initially awarded in 1998 to Malabu, a company linked to former Nigerian oil minister Dan Etete, the licence was later sold to Shell and Eni, the Reuters report added.
Italian prosecutors then alleged that most of the $1.3 billion purchase price for the licence for OPL 245 was siphoned off to politicians and middlemen. The two European energy giants and some of their former and current executives, including Eni CEO Claudio Descalzi, faced trial in Italy but all were acquitted in 2021, having denied all wrongdoing.
Eni and Shell declined to comment. Shell and Nigeria’s state-owned oil company NNPC had no immediate comment, Reuters said.
Meanwhile, OPEC+ has agreed a modest oil output boost of 206,000 barrels per day for April just as the US-Israeli war on Iran and Tehran’s retaliation disrupted oil flows from key members of the producer group in the Middle East.
OPEC+ has a history of raising oil output to cushion disruptions but analysts said the group currently has little spare capacity to add to supply, except for its leader Saudi Arabia and the United Arab Emirates, which will also struggle to export oil until navigation in the Gulf returns to normal.
Riyadh has been increasing oil production and exports in recent weeks by around 500,000 bpd in preparation for U.S. strikes on OPEC+ member Iran, sources told Reuters.
Oil, gas and other shipments from the Middle East via the Strait of Hormuz have come to a halt since Saturday after shipowners received a warning from Iran saying the area was closed for navigation.
Hundreds of ships dropped anchor and were not moving on Sunday and several ships came under attack. Hormuz is the world’s most important oil route accounting for over 20% of global oil transit.
Despite fears of a glut that would weigh on prices, global benchmark Brent crude has rallied this year and jumped on Friday to $73 per barrel, the highest level since July, on fears of a wider conflict in the Middle East.
Brent traded 8 per cent to 10 per cent up around $80 per barrel over the counter on Sunday, traders said.OPEC+’s output increase is unlikely to calm markets, said Jorge Leon, a former OPEC official who now works as head of geopolitical analysis at Rystad Energy.
“Prices will respond to developments in the Gulf and the status of shipping flows, not to a relatively small increase in output,” Leon said.
OPEC+ will raise production by 206,000 barrels per day from April, it said in a statement. It had debated options ranging from 137,000 bpd to 548,000 bpd, according to five sources who declined to be named because they are not authorised to speak to the press.
The agreed increase, which brings an end to a three-month pause in production hikes, represents less than 0.2 per cent of global supply, the Reuters report said.
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