Chinese Oil Giant Loses $100 Million Battle to Nigerian Firm Over Stolen Oil Block

Reported by: Ijeoma G | Edited by: Oravbiere Osayomore Promise.

A Federal High Court in Port Harcourt has dismissed a bid by the China National Petroleum Corporation (CNPC) to overturn a $100 million damages award in favour of Cutra International Limited, a Nigerian firm, over the disputed ownership of Oil Prospecting Licence (OPL) 471, bringing the long-running legal battle closer to the enforcement phase.

In a ruling delivered on Friday, April 24, 2026, Justice Adamu Turaki Mohammed of the Federal High Court in Port Harcourt threw out an application filed by CNPC seeking to set aside the court’s earlier judgment of May 23, 2025. The judge held that the Chinese oil giant failed to establish any legal basis to revisit the matter, noting that the court had become functus officio after its initial decision. “When a court takes a position on a matter in controversy before it, that court becomes functus officio with respect to that matter in controversy, and the court stands and remains bound by the decision,” Justice Mohammed ruled. The application, which was filed on October 28, 2025, was dismissed in its entirety, with the judge stating that granting the reliefs sought would not serve the interest of justice.

The dispute dates back to the 2006 mini-bid round when the Nigerian Federal Government awarded OPL 471, an oil block located in the shallow offshore waters of the western Niger Delta, to CNPC and its designated Nigerian local partner, Cutra International Limited. Under the terms of the award letter issued by the Ministry of Petroleum Resources on June 29, 2006, Cutra was entitled to a 10 per cent equity stake in the oil block, serving as the mandatory local content vehicle for the deal. The arrangement was meant to ensure Nigerian participation in the lucrative oil sector as part of the government’s indigenisation policy.

According to court filings, the partnership soured when CNPC unilaterally returned the oil prospecting licence to the Federal Government on November 1, 2015, without any prior consultation or consent from Cutra. The Nigerian firm alleged that it was not informed of the decision and only discovered the development later. Aggrieved by the action, Cutra approached the court, arguing that CNPC’s unilateral return of the licence violated its proprietary rights and deprived it of substantial benefits and entitlements from the oil asset. The firm subsequently filed Suit Number FHC/PH/CS/136/2022 seeking damages for the loss.

In its substantive judgment delivered on May 23, 2025, the court ruled in favour of Cutra, declaring that the Ministry of Petroleum Resources had awarded OPL 471 jointly to both parties. “In my view, the plaintiff has proved that the ministry of petroleum resources awarded OPL 471 to both the plaintiff and the defendant and the equity participation of 10 per cent in favour of the plaintiff,” Justice Mohammed held at the time. The court also rejected CNPC’s argument that it was unaware of the proceedings, noting that the company had been properly served with court processes through DHL courier, email, and publication in national dailies but failed to enter any appearance or file a defence.

Having established liability, the court proceeded to assess the appropriate quantum of damages. During the proceedings, Cutra presented evidence estimating the minimum value of the OPL’s yield at $5 billion. Crucially, the court noted that this figure was not challenged by CNPC, which had chosen not to participate in the proceedings. Relying on the uncontroverted evidence before it, the court determined that a substantial award was warranted. Although Cutra had sought $500 million in damages, representing its projected minimum earnings from the block, the court held that certain portions of the claim were not strictly proved. After a careful assessment, Justice Mohammed awarded $100 million in favour of the Nigerian firm. “In the light of the foregoing, what I assess and find reasonable is to award the sum of USD$100,000,000.00 in favour of the Plaintiff against the Defendant. I so hold,” the judge declared.

Following the judgment, CNPC filed an application on October 28, 2025, seeking several reliefs, including an extension of time to challenge the judgment, an order to vacate the orders for substituted service, an order to strike out the originating summons, and a dismissal of the entire suit. The corporation argued that it was denied a fair hearing because it was never properly served with the court processes, and that it only became aware of the judgment after garnishee proceedings were initiated against its accounts in Nigeria. CNPC also contended that the originating summons had expired and that, as a foreign company, it ought to have been served through diplomatic channels rather than via courier service and newspaper publications.

Cutra opposed the application, insisting that CNPC had been served repeatedly through multiple channels and had deliberately chosen to ignore the proceedings. Justice Mohammed, in his ruling on April 24, 2026, agreed with the Nigerian firm. “From the record before the court, I can confirm that the originating summons and hearing notices were served on the defendant vide courier service, emails and publication on national dailies, but the defendant did not file any response or appear before the court,” the judge said. He also rejected CNPC’s argument concerning diplomatic channels, stating that the company failed to establish any convention between Nigeria and its home country that would render the Federal High Court rules on substituted service inapplicable.

Dismissing the application in its entirety, Justice Mohammed emphasised that the court had already taken a definitive position on the substantive issues, and that it lacked the authority to revisit or reconsider those same matters except under legally recognised circumstances. “Based on the foregoing decisions of this court, I am of the view that it will not be in the interest of justice to grant any of the reliefs sought in the instant application, and it is accordingly dismissed,” the judge ruled. The decision effectively reaffirms the $100 million award in favour of Cutra, leaving CNPC with limited options for further appeal.

The development marks a major legal victory for Cutra International Limited and reinforces the authority of the Nigerian Federal High Court in the determination and enforcement of high‑value commercial claims involving foreign corporate entities. Industry observers expect that attention will now shift to the enforcement phase of the judgment, particularly given the international dimensions of the dispute and the substantial financial implications arising from the court’s decision. The ruling is anticipated to generate significant discussion within legal, financial, and commercial circles, where large‑scale cross‑border disputes often raise complex questions relating to jurisdiction, contractual obligations, and the enforcement of judgments against foreign companies. As of the time of this report, CNPC has not indicated whether it intends to appeal the ruling to a higher court.

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