Court Battle Between These Companies May Reshape Nigeria’s Oil Partnerships
- February 11, 2026
The battle over the control of a marginal oil field in oil-rich Rivers State has left two indigenous companies, previously partners, locked in a legal fight that could impact investment in Nigeria’s oil and gas sector, especially in areas of partnerships.
Eurafric Energy and Petralon 54 have been in court for more than five years over control of the Dawes Island marginal field, also known as OPL 2006. Marginal fields are smaller oil blocks developed by indigenous companies usually plagued by funding challenges and production delays.
But in a ruling delivered on January 29, a Federal High Court sitting in Lagos declared Eurafric the rightful owner of the contested oil field, nullifying a previous award to Petralon. The court also ordered the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to immediately reinstate the OPL 2006 licence to Eurafric. The court’s decision was based on provisions of the Petroleum Industry Act, 2021.
Industry analysts who spoke with Energy Focus Africa believe the ruling could expose some of the joint ventures signed before the passage of the PIA to judicial scrutiny.
South Africa-based energy advocacy group African Energy Chamber (AEC) said the judgment sets a precedent where lower courts intervene in technically complex petroleum matters “in a manner inconsistent with regulatory practice and fiscal governance”.
“At a time when Nigeria is actively courting new upstream capital, visible execution, compliance and royalty generation should be reinforced – not destabilized,” AEC Chair, NJ Ayuk said in a statement, adding that the ruling sends the wrong signal to the market.
“This is not just about one field. It is about supporting Nigerian companies that are investing in Nigeria, creating jobs, increasing production and strengthening our energy security. If Nigerian independents are placed in a precarious position by inconsistent judicial decisions, it will deter both local and international investment,” Ayuk added.
Nonetheless, Petralon has vowed to appeal the ruling and has obtained a stay of execution, according to multiple sources who briefed Energy Focus Africa. With the dispute now referred to higher courts, a timely resolution is not in sight—at least for the next two years.
How a JV went south
Eurafric, the original owner of OPL 2006, brought in Tako E&P as a technical and financial partner mid 2000s. Tako later ceded parts of its interest to Petralon, resulting in a three-way joint venture. Despite the partnership, Eurafric retained the controlling stake.
The trio operated the oil field, producing more than 62,000 barrels of crude oil until 2020, when the licence was revoked by the Department of Petroleum Resources. At the time, the government revoked 11 licences for inactivity.
Although a presidential directive reinstating the licences upon payment of applicable signature bonuses was announced, the OPL 2006 licence was still withheld. Eventually, the oil field was re-awarded solely to Petralon 54 Limited, effectively excluding Eurafric and Tako. This resulted in litigation and arbitration cases in various courts.
In its final judgment, the Federal High Court in Lagos sided with Eurafric’s position, holding that regulatory powers must be exercised in accordance with the law and that illegality cannot be validated by subsequent transactions.
The court also ruled that Petralon could not lawfully retain benefits derived from an invalid revocation and that the NUPRC was bound to restore the field to its original awardee.
Petralon, however, contested the court’s reliance on the Petroleum Industry Act (PIA) of 2021, arguing that Eurafric’s rights were initially revoked in 2020, prior to the adoption of the new Act. This argument is expected to form part of Petralon’s appeal against the ruling.
