A receiver-manager has moved to take over Nestoil, a major oil and gas services company, over an outstanding debt valued at approximately $1 billion.
The development has raised widespread concerns across the energy sector and financial markets, given Nestoil’s pivotal role in Nigeria’s oil services industry.
Oil and gas industry analysts have questioned the persistence of banks’ closure of oil-producing assets, warning of the consequences of shutting down critical industry assets that buffer the country’s fledgling economy.
Industry experts who spoke with LEADERSHIP expressed their reactions to the armed police officers who sealed Nestoil’s headquarters in Lagos on Tuesday.
A Federal High Court had authorised the enforcement of the asset seizure linked to an alleged multibillion-dollar debt default.
LEADERSHIP reports that the operation followed a ruling by Justice D. I. Dipeolu of the Lagos Division on October 22, 2025, granting a Mareva injunction, a court order freezing assets, to First Trustees Limited and its subsidiary, FBNQuest Merchant Bank.
The injunction targeted Nestoil Limited, its affiliate Neconde Energy Limited, and their principal promoters, Ernest Azudialu-Obiejesi and Nnenna Obiejesi.
Reacting to the development, energy sustainability expert and management consultant Meka Olowola said the order and enforcement have many implications for industry operators operating in a volatile environment.
Olowola said efforts should have been conducted to properly evaluate and reconcile the operating company’s financial books to determine if its finances had been impacted by insecurity and restiveness, which have largely affected pipelines within the operating environment.
According to him, the action would dissuade companies and investors who understand the business environment, especially in the Niger Delta region.
He said most international oil companies are divesting due to large-scale oil theft, asset sabotage, and other factors that have prevented the smooth flow of petroleum industry operations.
In his reaction, energy lawyer, Barr. Chukwuebuka Ibeh said that banks and creditors have a legal right to demand repayment of their loans, and the court has demonstrated commendable effectiveness in delivering an order on such a large debt.
“However, the effect of this development on the oil and gas industry should be of great concern to the country. Lenders may become increasingly cautious about extending credit to oil and gas-related companies. Operational continuity and contract performance could be disrupted, while employees, subcontractors, and vendors may face uncertainty as the legal proceedings unfold.” Ibeh said.
Financial economist at Nnamdi Azikiwe University, Dr. Felix Echekoba, noted that Nestoil is among the leading indigenous Engineering, Procurement, Construction & Commissioning (EPCC) firms in Nigeria’s oil and gas sector. Its receivership suggests fragility even for large local players. The debt freeze and asset-takeover (Mareva injunction) disrupt its operations: assets, headquarters and its affiliate Neconde Energy Limited’s interests (including in OML 42) are affected. He said for the broader oil and gas service supply chain this may reduce confidence; contractors may see higher risk of payment delays, contract cancellations or firm exits. That could reduce local employment, capacity building, and the government’s ability to enforce or rely on local content programmes. The cash-flow pressures on the sector may worsen: global oil price volatility plus Nigeria’s regulatory and fiscal uncertainty already weigh on service firms. A marquee failure of a major service firm may cause downstream lenders and clients to pull back, tightening credit and leading to consolidation or exit of smaller players.For the Nigerian economy, because the oil and gas sector remains a significant foreign-exchange earner and employment source, a decline in service-capacity (due to failures, retrenchments or idling of projects) could reduce future production, slow project implementation (e.g., new field development, pipelines, infrastructure) and thereby weaken government revenue, FX inflows and growth.
Also speaking, financial economist at Auchi Polytechnic, Zakari Mohammed, said the debt figure is substantial. He said that kind of exposure can affect banks, creditors, and the broader financial sector if provisions/loses mount. A consortium of lenders (including major Nigerian banks) have interests in this case.
He noted that large corporate defaults in the oil & gas space have ripple-effects: non-performing loans, higher provisioning, tighter lending. If many such defaults mount, it could reduce credit to the real economy or raise cost of capital for all firms.
According to Ibeh, a high-profile case of this nature could also have ripple effects on the NCDMB’s efforts to promote local content and facilitate funding for indigenous oil firms. He noted that it serves as a wake-up call for oil companies to strengthen their financial management and corporate governance structures.
“For clients with existing contracts with the affected oil service firm, acting swiftly to review and reconcile their contractual obligations may be necessary. Deadlines may need to be extended, force majeure clauses could be invoked, and representations and warranties may require reassessment to mitigate exposure and ensure compliance,” he added.
LEADERSHIP reports that police officers, acting under the direction of the Deputy Inspector General of Police (Operations), assisted court bailiffs and the appointed receiver-manager in enforcing the ruling.
A certified letter from the court’s Deputy Chief Registrar, Longs G. Longwa, instructed the police to aid in the asset takeover. The letter read: “Pursuant to the Order of this Honourable Court dated 22 October 2025, you are requested to kindly use your good office to assist the Bailiffs of this Court in executing the attached copy of Court Order,” reports said.
The directive empowered law enforcement to provide security for the enforcement team at Nestoil’s head office, located at 41/42 Akin Adesola Street, Victoria Island, Lagos. This move effectively transferred operational control of the premises to the court-appointed receiver-manager.
At the heart of the dispute lies a debt claim exceeding $1.01 billion and N430 billion as of September 30, 2025. First Trustees and FBNQuest Merchant Bank alleged that Nestoil, Neconde Energy, and their directors defaulted on multiple credit facilities extended to them over several years.
Justice Dipeolu’s ruling froze the defendants’ bank accounts and shares across over 20 Nigerian financial and corporate institutions. The list includes Citibank Nigeria, Guaranty Trust Bank, Fidelity Bank, Polaris Bank, Stanbic IBTC, Standard Chartered, Titan Trust Bank, and Wema Bank.
The court appointed Abubakar Sulu-Gambari (SAN) as the receiver-manager on behalf of the plaintiffs to oversee the takeover and recovery process. He was granted authority to assume control of Nestoil’s assets, subsidiaries, and interests, including Neconde Energy’s stakes in Oil Mining Lease (OML) 42, jointly operated with the Nigerian National Petroleum Company Limited (NNPCL).
The Federal High Court further ordered the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and NNPCL to cooperate with the receiver in managing the oil block’s production and revenue flows. The court also mandated multiple security agencies—including the Nigeria Police Force, Nigerian Navy, and State Security Service (SSS), to protect the takeover operations.
