Nestoil’s Fall Under Receivership: The Anatomy of a Corporate Debt Storm
Nigeria’s oil and gas engineering giant, Nestoil Limited, has come under intense financial scrutiny as a consortium of lenders, led by First Trustees and FBNQuest Merchant Bank, secured a court-ordered receivership over the company and its affiliates. The ruling—granted by Justice D. I. Dipeolu of the Federal High Court, Lagos—followed claims that Nestoil and its sister company, Neconde Energy Limited, defaulted on obligations exceeding $1 billion and ₦430 billion.
The order, known as a Mareva injunction, effectively froze the company’s accounts, assets, and shareholdings across more than 20 Nigerian banks and financial institutions, pending determination of the substantive case scheduled for November 7, 2025.
Armed police, acting under judicial authority, sealed Nestoil’s iconic headquarters on Akin Adesola Street, Victoria Island, signaling the most dramatic corporate enforcement action seen in Nigeria’s oil and gas sector in years.
The Debt Web: How the Crisis Escalated
At the heart of the receivership is a complex multi-bank exposure involving both local and foreign currency loans. According to court filings, Nestoil, Neconde, and their promoters—Dr. Ernest Azudialu-Obiejesi and Mrs. Nnenna Obiejesi—owed more than $1.01 billion and ₦430 billion as of September 30, 2025.
Breakdown of the guarantees paints a sobering picture:
- ₦366.8 billion and $61.2 million owed to Access Bank Plc;
- $152 million guaranteed to First Bank of Nigeria Limited;
- ₦10.4 billion and $213.8 million owed to Zenith Bank Plc;
- $62.4 million owed to Union Bank Plc.
The cumulative liabilities—spread across multiple facilities—underscore the highly leveraged structure that funded Nestoil’s rapid expansion in oil services, construction, and upstream ventures.
Court Orders and Asset Control
The Federal High Court granted sweeping orders empowering the receiver/manager, Mr. Abubakar Sulu-Gambari (SAN), to take possession of all identified assets belonging to Nestoil and Neconde Energy.
The directive extends to Neconde’s Oil Mining Lease (OML) 42, a major joint venture asset with the Nigerian National Petroleum Company Limited (NNPCL). The court instructed the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), NNPC E&P, and related agencies to grant the receiver full access to the oil block, including rights to production revenue and receivables.
To ensure enforcement, the court mandated cooperation from the Nigeria Police Force, Nigerian Navy, and the Department of State Services (DSS)—underscoring the national significance of the case.
What the Ruling Means for Nigeria’s Banking and Energy Sector
The Nestoil case marks a turning point for Nigeria’s credit market, reinforcing lender assertiveness amid mounting non-performing loans in the oil and gas sector. Analysts say the decision sends a strong message that banks are now more willing to enforce debt recovery through receivership rather than prolonged negotiations.
For context, Nestoil—founded in 1991—was one of Nigeria’s most successful indigenous oil service companies, executing major engineering, procurement, and construction (EPC) contracts for NNPC, Shell, Chevron, and other IOCs. The company’s diversification into upstream production via Neconde Energy’s acquisition of OML 42 in 2012 was hailed as a bold step in local content development.
However, the combination of falling oil prices, delayed receivables, and heavy debt financing has now exposed the fragility of debt-funded expansion models in Nigeria’s volatile energy landscape.
Nestoil’s Response: ‘We Remain Fully Operational’
In a statement issued after the receivership order, Nestoil Group maintained that the matter was purely commercial and under legal review.
“The situation relates to a commercial matter currently before the courts, which is being addressed through appropriate legal and regulatory channels,” the company said.
“We continue to cooperate fully with all relevant authorities and financial partners to resolve outstanding matters transparently and responsibly. Nestoil remains fully operational across all business lines.”
The Group emphasized that its subsidiaries in oil, gas, power, and infrastructure continue to operate without disruption, with measures in place to protect its workforce and maintain obligations to clients and partners.
BRANDECONOMY Insight: The Larger Picture
The Nestoil saga is more than a corporate debt dispute—it reflects a broader stress test of Nigeria’s post-reform economy. As the Tinubu administration expectedly pushes for fiscal discipline, exchange rate unification, and tighter banking oversight, major borrowers are now confronting market realities of higher interest rates and stricter loan covenants.
For the financial sector, it’s a wake-up call to tighten credit governance, collateral tracking, and oil-sector risk exposure. For indigenous energy firms, it’s a reminder that scale without sustainability is a dangerous pursuit.
Nestoil’s receivership also raises critical questions about local participation in oil assets under the Petroleum Industry Act (PIA). If unresolved, it could deter future investors seeking stable frameworks for asset financing and revenue sharing.
Yet, within the challenge lies opportunity—if restructuring and transparency prevail, this episode could usher in a new era of disciplined corporate finance in Nigeria’s energy value chain. Nigerians and the global business community are watching to see how things eventually pan out in this Nestoil saga.
BELOW ARE THE ORDERS GRANTED BY THE COURT
1. That Motion Ex-parte dated 15th October,
2025 and filed on 20* October, 2025 succeeds in part, prayers 1 and 2, 4 – 10 are granted. Prayer 3 is refused.
2. That an Order of Mareva Injunction is
hereby made restraining the 1s and 2nd
Defendants, their agents and servants from
operating, or dealing with the 1″ and 2d Defendants’ funds or shares in the Affected Party, banks or financial Institution within Nigeria, up to the amount claimed by the Plaintiffs/Applicants in the sum of USS1,012,608,386.91 (One Billion Twelve Million Six Hundred and Eight Thousand Three Hundred and Eighty- Six United Stated Dollars Nine One Cents) and NGN430,014,064,380.77 Four Hundred and Thirty Billion Fourteen Million Sixty-Four Thousand Three Hundred and Eighty Naira Seven- Seven kobo being the outstanding
indebtedness of the Defendants as of 30th
September 2025 in respect of the 1st Defendant’s indebtedness, pending the hearing and determination of the Motion on Notice.
3. That an Order of Mareva Injunction is
hereby made restraining the 3rd and 4th
Defendants, their agents and servants from
operating, or dealing with their accounts, funds and shares, and in particular, associated with BVN: 22249223297 and 22182186684 in any of the Affected Parties, banks, financial institutions and related companies, up to the sums of:
a. NGN366,797,069,094.48 (Three Hundred and Sixty-Six Billion, Seven Hundred and Ninety-Seven Million, and Sixty-Nine Thousand, and Ninety- Four Naira Four Eight Kobo) and
US$61,213,667.57 (Sixty-One Million, Two Hundred and Thirteen Thousand, Six Hundred and Sixty-Seven United States Dollars Five Seven Cents) being the amount personally guaranteed by the 3rd Defendant for the j$t Defendant’s indebtedness to Access Bank Ple as of 30″h September 2025.
b. $152,031,856.21 (One Hundred Fifty-Two Million Thirty-One Thousand Eight Hundred Fifty-Six Dollars and Twenty-One Cents) being the amount personally guaranteed by the 3rd and 4th Defendants for the 15 Defendant’s
indebtedness to First Bank Nigeria Limited as of 30* September 2025; c. N10,430,376,065.92 (Ten Billion, Four Hundred Thirty Million,Three Hundred and Seventy-Six Thousand, and Sixty-Five Naira Ninety-Two Kobo and $213,829,487.61 (Two Hundred Thirteen Million Eight Hundred Twenty-Nine Thousand Four Hundred Eighty-Seven Dollars and Sixty-One Cents) being the amount personally guaranteed by the 3d Defendant for the 1s Defendant’s indebtedness to Zenith Bank Plc as of 30* September 2025;
d. $62,493,290.19 (Sixty-Two Million Four Hundred Ninety-Three Thousand Two Hundred Ninety Dollars and Nineteen Cents) being the amount personally guaranteed by the 3rd Defendant for the 15 Defendant’s indebtedness to Union Bank Plc as of 30th September 2025.
Totaling $485,668,638.83 (Four Hundred Eighty-Five Million Six Hundred Sixty-Eight Thousand Six Hundred Thirty-Eight Dollars and Eighty-Three Cents) and N389,926,180,446.69 (Three Hundred and Eighty-Nine Billion, Nine Hundred
a n d Twenty-Six Million, One Hundred and Eighty Thousand, Four Hundred and Forty-Six Naira Sixty-Nine Kobo), pending the hearing and determination of the Motion on Notice.
4. That an order is hereby made granting
leave to the Receiver/Manager to take over
the 1st Defendant’s office situate at 41/42,
Akin Adesola Street, Victoria Island, Lagos
State and/or any other asset of the 15
Defendant wherever it may be found within
the jurisdiction of this Court, and to
preserve all the assets/properties of the 1st
Defendant by virtue of the Deed of
Appointment dated the 21» of August 2025,
pending the hearing and determination of
the Motion on Notice.
5. That an order is hereby made granting
leave to the Receiver/Manager to take over
the 2nd Defendant’s office situate at 41/42
Akin Adesola Street, Victoria Island,
Lagos; any other asset of the 2’* Defendant
wherever it may be found within the
jurisdiction of this Court; and/or the 2nd
Defendant’s interest in OML 42 JV by
virtue of the Deed of Appointment dated
the 21″ of August 2025, pending the
hearing and determination of the Motion on
Notice.
6. That an order is hereby made directing the
Inspector General of Police; the Assistant
Inspector-General of Police in Charge of
Lagos (Zone 2); Port Harcourt (Zone 6) and
Abuja, Federal Capital Territory (Zone 7),
respectively, the Commissioners of Police,
Lagos State, Rivers State and the Federal
Capital Territory, respectively, and other
officers under their control, to provide
security and to assist the Receiver/Manager
appointed by the 2nd Plaintiff and the
Bailiff of this Honourable Court for the
purpose of enforcing and executing the
Orders made herein regarding all the 15t
Defendant’s assets covered by the Al
Assets Debenture and the 2″d Defendant’s
assets and/or interest in OML 42 JV stated
in the Deed of Charge dated 8th December
2022.
7. That an order is hereby made directing
officers of the Nigerian Navy, Directorate
of States Security Services, and the Marine
Police to render necessary assistance to the
2nd Plaintiff and the Receiver/Manager to
take over the 1″ Defendant’s assets and 2nd
Defendants stake in OML 42 JV Activities
and all the assets herein in the exercise of
his functions under the Deeds of
Appointment dated 21″ August 2025.
8. That an order is hereby made directing the
Nigerian Upstream Petroleum Regulatory
Commission (NUPRC), NNPC Exploration
and Production Limited, NNPC Upstream
Investment Management Services Limited
(formerly National Petroleum Investment
Management Services – NAPIMS),
Nigerian Petroleum Development Company Limited and Nigerian National Petroleum Company Limited to grant Mr. Abubakar Sulu-Gambari SAN, the Receiver/Manager, access to OML 42 (and OML 42 JV); cooperate with the Receiver in the exploitation, production and sale of gas and other hydrocarbons; and cooperate
with the Receiver in exercise of the rights
and receiving the benefits, interest, claims
and proceeds of payment and receivables due from OML 42 JV, OML 42 JV Activities and OML 42 JV Contracts; all in the exercise of his functions under the Deed of Appointment dated 21» August 2025.
9. That an order is hereby made granting leave to the Receiver/Manager to publish the prescribed, statutory and procedural Notices depicting the current status of the and 2nd Defendants (now in receivership) as may be deemed fit in any Daily or Nationally circulated Newspaperin Nigeria.
10. That an order is hereby made directing and/or compelling the Affected Parties
harboring the Defendants’ shares, assets, bonds, funds howsoever described, whether held directly by the Defendants or via proxy, to depose on Oath the shares, assets, investments, sums etc., standing to the credit of the Defendants in their custody within 7 days from being served with a copy of the Order of Court.
11. That the Plaintiffs/Applicants shall file a duly worded undertaking to indemnify the Defendant in the event that this order ought not to have been granted.
12. That case is adjourned to 7ih November,
2025 for hearing of the Motion on Notice.
ISSUED AT LAGOS under the seal of this
court and the hand of the Presiding Judge this
22nd day of October, 2025.
