Sub-Saharan Africa’s leading provider of engineering, procurement, construction, and commissioning (EPCC) services, as well as Nigeria’s top supporter of local content growth, Nestoil Limited, has been in the news since October 22, 2025, more than ever.
What’s the reason for that? A Mareva order granted on that day by Justice D.I. Dipeolu of the Federal High Court, Lagos Division, authorized the takeover of assets belonging to Nestoil Limited, its affiliate Neconde Energy Limited, and their promoters, Dr. Ernest and Nnenna Azudialu-Obiejesi.
In addition, the order directed all affected financial institutions to disclose under oath, details of funds or investments belonging to Nestoil and its affiliates within seven days of being served with the order.
Justice Dipeolu also restrained dealings in the total outstanding indebtedness as of September 30, 2025, amounting to $1, 012, 608, 386.91 and N430,014,064,380.77.
Moreover, the injunction listed Citibank Limited, Fidelity Bank Plc, Guaranty Trust Bank Plc, Globus Bank Limited, Keystone Bank Limited, Opay Limited, Polaris Bank Limited, Providus Bank Limited, Stanbic IBTC Bank Limited, Standard Chartered Bank Nigeria, Sterling Bank Plc, Titan Trust Bank Limited, Unity Bank Plc, and Wema Bank Plc as the “affected parties,” and ordered them to freeze the assets of the defendants.
Debts additionally guaranteed by Mr Azudialu-Obiejesi were also disclosed to include more than N366.8 billion, $61.2 million, $152 million, and N10.4 billion in favour of Access bank, First Bank, and Zenith Bank.
A swift move by First Trustees and its subsidiary, FBNQuest Merchant Bank, ensured that the company’s headquarters in Victoria Island, Lagos, was sealed off.
However, Nestoil is said to be working its socks off with sleeves rolled up to address the otherwise intimidating development. In an official statement, the company has affirmed that its operations remain fully functional despite the court-ordered receivership and sealing of its imposing Lagos headquarters. It was a smart and nimble move to secure the interests of all strategic stakeholders.
It is also pursuing legal remedies for the development, assuring stakeholders of business continuity. The company’s official statement and position on the receivership emphasize uninterrupted operations, provide clarifications to stakeholders, reaffirm its commitment to transparency, and outline its legal engagements. The company emphasizes that its business activities across subsidiaries and project sites continue as normal, with staff working remotely to maintain continuity. The company also reiterated its commitment to resolving the problem transparently and responsibly. Nestoil further says it is engaging with relevant authorities and financial partners to settle the development through legal and regulatory channels.
Not leaving anything to chance, the company has adopted dexterous legal counteraction as one of the options in resolving the matter. Reclining on this, Nestoil filed a motion on October 28, 2025, in the Federal High Court, Abuja, to restrain eight Nigerian banks and Afreximbank from proceeding with the receivership, with the motion challenging the enforcement actions and seeking to protect its assets and the interests of other shareholders while the dispute is adjudicated.
The Cause
Analysts say that the financial challenges experienced by Nestoil arose largely from a hefty debt load, part of which is dollar-denominated, and worsened by the considerable devaluation of the Naira and wide-ranging economic gusts.
The core contributors, experts say, derive from multiple-dollar debt that has reportedly seen Nestoil and its affiliate, Neconde Energy, amass a total indebtedness in excess of $1 billion and hundreds of billions of Naira to a consortium of Nigerian lenders, including FBNQuest Merchant Bank, Access Bank, First Bank, and Zenith Bank. This development has placed the banks under the necessity to keep the company under receivership by the fiat of a Federal High Court.
Many indigenous oil and gas companies, including Nestoil, which were heavily reliant on borrowing in U.S. dollars in the early 2010s when the exchange rate was more stable, have faced severe challenges caused by the ongoing and drastic weakening of the Naira.
As expected, this has made it extremely difficult to service dollar-denominated loans, which are now much more expensive and harder to manage, severely affecting companies’ balance sheets and cash flow. Additionally, oil price volatility and other issues that have reduced production—especially since the 2014 price collapse and the resulting market shockwaves and violent swings, along with pipeline sabotage and missed production targets—have made it difficult for domestic oil companies to meet their financial projections and loan repayment schedules.
Experts also attribute Nestoil’s challenges to liquidity pressures and project delays, which are evident in slow payments from clients in the oil and gas, power, and infrastructure sectors.
Macroeconomic instability has also been identified as a contributing factor, as the environment battles with foreign exchange, high interest rates, and policy changes that pose challenges to firms, especially those that are capital-intensive.The Probable Effect
The company has been placed under receivership by a consortium of lenders in response to the Mareva injunction granted by a court. The company’s head office in Lagos has been sealed up by the police. It is expected that the legal and financial intervention by the lenders could trigger immediate constraints on cash, asset access, and corporate decision-making, which can affect project execution, contracts, workforce stability, supplier relations, and partner confidence.
What could be the overall impact of the development? Experts have identified cash flow and working capital as having an immediate hit.
By their explanations, receivership means lenders and appointed receivers control cash collection and disbursement. They add that routine operational cash, such as payroll, supplier payments, and emergency capital expenditure, may be delayed or require the receiver’s approval. This, they further state, may interrupt activities at inactive sites and logistics.
Court-ordered possession and a sealed headquarters might also limit management’s physical access to records, banks, and corporate functions, a development that can complicate coordination and rapid decision-making.
Oftentimes, receivers review, suspend, or negotiate major contracts to preserve value. In the process, mobilisation on new projects may be halted, with existing EPC/EPCC commitments exposed to suspension or reassignment depending on guarantees and contract clauses. Project execution risk may also begin to build up as ongoing projects that require steady cash and supplier credit, such as pipelines, flow stations, offshore support, might face schedule slippage, de-mobilisation, or even scaled-back scope if funding or approvals are withheld.
Among the outcomes to be expected when receiverships happen are payroll uncertainty and site slowdowns, which impact the workforce and subcontractors. This raises retention and morale risks for employees and contractor crews. In response to this, subcontractors may stop work or seek payment security such as retentions and liens.
There is also the issue of regulatory security exposure, as high-profile legal actions can spur regulatory scrutiny, impair licences or permits renewals, and increase the risk of site disruptions or creditor-led enforcement actions.
In short-to-medium-term scenarios, concerns include stabilization under receivership, asset sales or carve-outs, restructuring, and lender-backed rescues, as well as prolonged disruptions or liquidation. Under this scenario, receivers may implement selective operations while debts are restructured. Priority projects proceed with strict cash controls, aimed at preserving value and enabling a gradual return to full operations. In extended cases, receivers sell non-core assets to repay lenders.
This highlights the need for urgent steps to ensure that Nestoil’s businesses, such as marine logistics, Nestav, or other specific project units, are not targeted or spun off. Another option when receiverships occur is to pursue negotiated debt restructuring or recapitalization that could regain management control. However, this might also involve new governance, equity dilution, or covenants. Prolonged disruptions or forced liquidations may be considered if creditors can’t reach agreements or if asset sales prove insufficient. This could result in contract cancellations and supply chain issues.
A Statement
“Nestoil is aware of the reports and ongoing legal processes referenced in the media. The situation relates to a commercial matter currently before the courts, which is being addressed through appropriate legal and regulatory channels.
“The Group continues to cooperate fully with all relevant authorities and financial partners to resolve any outstanding matters in a transparent and responsible manner. Constructive discussions are ongoing, and we remain confident that these engagements will result in a fair and lasting resolution.
“Nestoil remains fully operational across all business lines. Our subsidiaries, projects, and commitments in the oil, gas, power, and infrastructure sectors continue without disruption.
“For over three decades, Nestoil has built a reputation as one of Nigeria’s foremost indigenous EPC and energy companies. We remain guided by our core values of resilience, integrity, and transparency, and will continue to conduct our business with professionalism and respect for the rule of law.
“We understand the concerns that recent reports may have generated and wish to assure all stakeholders that Nestoil Group remains financially strong, operationally stable, and strategically focused.” That’s the company’s interim official position.
Nestoil’s Profile
Nestoil is Nigeria’s leading provider of EPCC services in the oil and gas industry chain across Sub-Saharan Africa.
Founded in 1991 by Dr. Ernest Azudialu Obiejesi, the company, headquartered in Lagos, employs more than 3,000 people, with 95 per cent of them being indigenous Nigerians.
Principal services
Nestoil is a specialist in engineering, procurement, construction, and commissioning (EPCC) for oil and gas infrastructure. It is also a leading name in pipeline construction and maintenance, civil engineering and construction, power generation and distribution, marine logistics, and support services.
Known for its commitment and success in local content development, the company serves major international oil companies (IOCs).
Strategic Positioning
The company is Sub-Saharan Africa’s largest indigenous EPCC services provider to IOCs, and a champion of local content, actively promoting the Nigerian workforce and expertise in the energy sector.
In addition, it constitutes part of the broader business dynasty, which includes aviation, real estate, and power owned and promoted by Dr. Azudialu-Obiejesi
Industry Classification
Dun & Bradstreet, a Florida-based global leader in business data and analytics, helping companies manage risk, drive growth, and make informed decisions since 1841, indicates: “Nestoil operates within the Professional, Scientific, and Technical Services sector. Specific industries include architectural and engineering services, construction and civil engineering, and business support services.”
Industry experts maintain that the company is continuously stoking the fire of sustainability and innovation, pushing and expanding technological boundaries to make energy more accessible and sustainable in Africa. They add that Nestoil’s operations reflect a commitment to environmental stewardship and innovation in energy solutions.
Key Milestones
• The Nestoil Tower, which ranks as the first in West Africa to attain the Leadership in Energy and Environment Design (LEED) certification.
• The Shell Kolo-Creek Rumuekpe Trunkline Replacement Project (KCTL) was a first-of-its-kind project that involved a method of pipeline installation that preserves the delicate natural environment of the Niger Delta region.
• The Shell Nembe Field Logistics Base (FLB) operations and project execution created a window for population growth in and around the Nembe-Creek community.
• The Shell Nembe-Cawthorne Channel trunkline Replacement Project (NCTL) pipeline installation, which required 7 major river crossings, with Sego River as the longest, being approximately 1.1km
Mareva Injunction Explained
A Mareva injunction (also known as a freezing order) is an interim court order that freezes a defendant’s assets to prevent them from being moved, hidden, or disposed of while a legal case is ongoing.
The purpose is to prevent a defendant from frustrating a potential judgment by hiding, transferring, or dissipating their assets before the court can enforce its decision.
The term derives from a 1975 English case Mareva Compania Naviera SA v International Bulkcarriers SA, where such an order was first granted. It has since become common in English Law and many Commonwealth countries, including Nigeria and the United Kingdom.
Plaintiffs can apply for a Mareva injunction whenever they fear that defendants might sell or transfer assets, such as property, money, or shares, to avoid paying a future judgment.
Generally, it is a temporary measure, usually granted before the final judgment. It is neither a judgment determining guilt nor liability, but maintains the status quo.
Whoever applies for a Mareva must be prepared to convince the courts that they have strong evidence suggesting that the defendant is likely to dissipate assets and that they have good arguable cases.
Partners, clients, and suppliers, beware
Court orders and receiver statements define the parts of the business that should remain operational and who approves payments.
Contract clauses, such as force majeure, suspension, termination for insolvency, performance bonds, and parent company guarantees, play pivotal roles in determining continuity and remedies.
It is also the receiver’s responsibility to publish or notify clients about continuity plans, payment priority, and approved workflows.
Experts also say that monitoring progress on key projects, especially in mobilization levels, supplier payments on-site, including change-order approvals, remains a key indicator of the continuity of execution. Official notices and communications on restructuring, asset sales, and trustee instructions remain decisive for counterparty action. There are indications that the company has adopted this in its statement, insisting operations continue while the legal process unfolds.
Analysts emphasize that clients and IOC partners need to secure alternative delivery contingencies, confirm current realities regarding payment instructions, and verify performance bonds and insurance coverage. They also state that subcontractors and suppliers should demand written payment plans or escrow arrangements, document amounts owed, preserve lien rights where applicable, and limit further exposure until payment certainty improves.
And for employees? They should seek written communications about payroll continuity and benefits, while unionized staff should establish formal channels with management or receivers when receivership occurs. Additionally, analysts recommend that in such situations, lenders prioritize transparent asset valuation, conduct forensic cash flow analyses, and evaluate workout options versus recovery maximization strategies.
Overall, receivership may not halt all activities, but it centralizes control with receivers and creditors, reduces managerial autonomy, tightens cash flows, and elevates contract and execution risk.
