The decision refers to the revocation of Malabu's oil prospecting licence in oil block OPL-245. Malabu and Shell are contesting the ownership of the deepwater block, which reportedly contains up to 1bn barrels of oil. Of the fine $150 million is the cost of the contractual agreement Shell allegedly owed Malabu

In the report of its investigation on the revocation of OPL 245 license, the House Committee held that Shell should not have participated in the bidding that followed the revocation of the license, having being involved with Malabu in seismic surveys of the same block. Shell had been the junior partner to Malabu in the block, but Malabu's license was revoked and Shell outbid ExxonMobil to become the sole owner.

The committee said it was wrong to revoke the license particularly after Malabu had extracted assurances from the DPR in 2000 and 2001 "that OPL 245 was not affected by the revocation of oil blocks by the Federal Government."

The committee asked the Federal Government to revoke the license to operate OPL 245 it granted to Shell as the award was made in very murky circumstances, more so as the agreed signature bonus fee of $210 million has not to date been paid to the Nigerian Government by Shell.

The Nigerian company has issued legal proceedings over this in the UK and US, with the company claiming $US1bn in compensation.

Shell has stated that it will not comment on the case until a verdict on the company's legal challenge in Nigeria, whereby Shell is asking the Federal High Court to investigate Malabu's allegations, is reached.