The debt crisis surrounding Nestoil Limited took a major turn on Monday as the receiver-manager repossessed the corporate headquarters of the oil and gas engineering firm in Victoria Island, Lagos, over indebtedness worth over $2bn to several lenders.

The court-appointed receiver repossessed the building following a restorative injunction issued by the Court of Appeal, Lagos, which reinstated the receiver’s authority after weeks of conflicting court orders.

Heavily armed police officers were deployed to enforce the appellate court’s decision, as observed by one of our correspondents yesterday, in what appeared to be a significant escalation in the legal battle between the Nestoil Group and a consortium of Nigerian lenders.

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Nestoil, one of Nigeria’s leading energy and infrastructure companies, has been embroiled in a financial crisis linked to debts reportedly exceeding $2 billion.

The company, along with its sister firm Neconde Energy Limited, had taken multiple facilities from several banks to fund upstream oil operations and infrastructure projects.

As oil prices fluctuated and project timelines slipped, the companies struggled to service their obligations, leading to loan defaults and growing tensions with lenders.

On October 22, 2025, the Federal High Court in Lagos issued a Mareva injunction authorising First Trustees Ltd and FBNQuest Merchant Bank to take over Nestoil and Neconde’s assets.

Mareva injunction authorising First Trustees and its subsidiary, FBNQuest Merchant Bank, to take possession of the company’s assets.

In the suit, presided over by Justice D. I. Dipeolu, the order was granted against Nestoil Limited, its affiliate Neconde Energy Limited, and the company’s principal promoters, Ernest Azudialu-Obiejesi and Nnenna Obiejesi.

Also listed as defendants in the court proceedings are several financial and corporate institutions, including Citibank Limited, Central Securities and Clearing Systems Plc, Fidelity Bank Plc, Guaranty Trust Bank Plc, Globus Bank Limited, Keystone Bank Limited, Opay Limited, Polaris Bank Limited, Providus Bank Limited, and Stanbic IBTC Bank Limited.

Others include Standard Chartered Bank Nigeria, Sterling Bank Plc, Titan Trust Bank Limited, Unity Bank Plc, Wema Bank Plc, Gobowen Exploration and Production Limited, Hammakopp Consortium Limited, Krawcod Properties Limited, Santa Spring Oil and Gas Limited, Marine & Ocean Infinity Nigeria Limited, and White Dove Shipping Company Limited.

The order empowers the listed financial institutions to take control of the defendants’ assets pending the determination of the substantive case, scheduled for hearing in November 2025.

The injunction also restrains any dealings in funds amounting to $1,012,608,386.91 and N430,014,064,380.77, representing the total alleged indebtedness as of September 30, 2025.

In addition, there are other debts guaranteed by Ernest Azudialu-Obiejesi, reportedly totalling N366.8 billion, $61.2 million, $152 million, and N10.4 billion, owed to Access Bank, First Bank, and Zenith Bank.

The court also restrained the companies and their promoters, Ernest Azudialu-Obiejesi and Nnenna Obiejesi, from dealing with funds totalling $1.012 billion and N430 billion.

This represents the outstanding indebtedness as of September 30, 2025.

Following the Mareva order, Nestoil and Neconde sought relief from another division of the Federal High Court, asking that the asset-freezing injunction be set aside.

That court granted an order directing the receiver to stay the action, effectively pausing the takeover process.

The court also ordered the Lagos State Police Command to immediately withdraw its officers from the defendants’ premises.

Justice Daniel Osiagor in the judgement delivered in a ruling delivered on November 20, vacated an earlier order authorising law-enforcement presence at the facilities of Nestoil Limited, Neconde Energy Limited, and their directors, Ernest Azudialu-Obiejesi and Nnenna Obiejesi.

And on November 1, the company took full possession of its headquarters after the police were withdrawn from the building.

In the process, the company repainted the building to remove the possession order earlier inscribed on the building by the receiver-manager.

The lenders, led by FBN Merchant Bank and First Trustees, then approached the Court of Appeal to clarify the legal position and protect their interests.

Appeal court restores status quo

In a motion ex parte filed on November 26, 2025, the lenders asked the Court of Appeal to reverse all steps taken pursuant to the November 20 order that halted the receivership; and stop Nestoil, Neconde, and their promoters from obstructing the receiver/manager and suspend proceedings at the Federal High Court until the appeal is heard.

Justice Yargata Nimpar, presiding over the Court of Appeal in Lagos, granted all three requests in a ruling dated November 28, 2025.

The ruling effectively reinstated the receiver’s mandate and restored the original takeover process—at least until the court hears the substantive motion on December 4, 2025.

To enforce compliance and prevent interference, police officers moved into Nestoil’s headquarters on Monday, securing the premises under the receiver’s control.

What this means for Nestoil and the financial sector

Experts said the case has implications for Nigeria’s banking and energy sectors because of its scale and potential precedent.

Nestoil is regarded as one of the country’s largest indigenous oil services firms, and a forced takeover of this magnitude is rare.

For banks, the matter underscores growing concern about high-exposure loans to the oil and gas sector, many of which remain impaired due to production outages, pipeline vandalism, and, most importantly, the foreign exchange.

For Nestoil, the appellate court’s intervention represents a serious setback in its attempt to halt the receivership and renegotiate its obligations.

Prior to yesterday’s takeover, the management of Nestoil had insisted that it is not under any receivership while raising an alarm over an attempt to repossess the headquarters.

In a statement, the management of Nestoil Ltd and the management of Neconde Energy Ltd stressed that none of these companies is under any receiver/manager.

He described the receiver/manager as an impostor which has no lawful authority of receivership.

“The managements of Nestoil Ltd and of Neconde Energy Ltd have instructed their solicitors to commence legal claims for damages for any further interference with the affairs of the companies by anyone or any denial of services by banks, contractors and vendors to Nestoil and Neconde on account of the unlawful purported receiver/manager.”

Following the November 20 order, the receiver-manager had in an advertorial said the general public, particularly the commercial banks and other affected parties, “are put on notice that the Ruling of the Court setting aside the Ex-parte Orders DOES NOT affect the Receivership of the undersigned over NESTOIL LIMITED and the entire undertakings, stocks, goodwill, plant and machinery, moveable and immoveable assets of NECONDE ENERGY LIMITED in OML 42.”

The receiver-manager explained that he was appointed pursuant to the Deeds of Appointment dated August 19, 2025, filed at the Corporate Affairs Commission (CAC), notification of which was published on pages of newspapers.

Workers to resume at Nestoil building

Despite the takeover yesterday, it was learnt that workers of the oil firm have been mandated to resume work on Tuesday.

According to the management, the repossession has not affected the operation of the company, insisting the latest development is being misinterpreted.

Head of Communications at Nestoil Group, Walter Bossman, said the Appeal Court order did not stop the workers from coming to work. He stated that the company’s operations continue unhindered.

Nestoil case exposes banking risk – Expert 

A financial analyst, Mr Ayokunle Olubunmi, in a chat with our correspondent, said the ongoing legal battle over Nestoil showed one of the risks in banking.

While he said only the court would determine who is right or wrong among the parties, he stated that the ongoing battle should be a learning curve for the banking sector.

Olubunmi, who is Head, Financial Institutions Ratings at Agusto&Co, said, “The court has the power to determine who is right or wrong.

“But I think it’s one of the risks, one of the things that you see in banking, and these are facilities that over the years, the banks have been restructuring.

“A lot of banks have been restructuring the facility to actually even make it good. I think it’s also a learning curve for the banks in terms of reinvesting facilities, adequately monitoring them and particularly if it is an FX (foreign exchange) facility because it’s actually an over exposure.

“Exposure to the oil and gas sector is something that the banks need to actually be careful about. Of course, we all saw what happened to AITEO and all these other exposures. The summary, for me, I don’t think it’s easy. It’s not easy for me to say who is right or wrong. The court will definitely determine that.

“But something that is obvious is this. The banks give money. Has that money been repaid? The answer seems to be no.

“So there’s an outstanding amount somewhere, right. So I think the banks also need to take their lessons from it, try and also see how you can reinvest your facilities right, once there are early warning signals, quickly move in on time.

“The last straw that broke the camel’s back was the forbearance because it is one of the facilities under forbearance.”

Nestoil, founded in 1991 by Ernest Azudialu-Obiejesi, is Nigeria’s largest indigenous Engineering, Procurement, Construction and Commissioning (EPCC) Company in the Oil and Gas sector.

However, in recent years, the company has reportedly faced liquidity pressures over indebtedness to lenders.

Daily Trust reports that the company in 2018 had decided to offload part of its shares in oil mining lease (OML) 42 in the Western Niger Delta, which is operated by Neconde Energy Limited, to pay its debts to banks.

With about 2000 direct employees, Nestoil said it continues to redefine industry standards in Pipeline Construction, Repairs and Maintenance with associated facilities for Dredging, River Crossing and Shoreline Protection.

The company specialises in pipeline construction, repairs, and maintenance.  It also provides associated services like dredging, river crossing, and shoreline protection.

Nestoil operates subsidiaries in drilling, energy technology, and dredging, enhancing its role in oilfield services and energy sustainability.  The group emphasises safety, technology integration like AI for risk prevention, and high standards in health and the environment.