By Amah Alphonsus Amaonye
Director General, African Writers Centre (AWC)
Nestoil is a national asset from all analysis and so, deserves a pat on the back for resilience, hard work, and achieving 50,000 bpd of crude in OML 42 even as suspicious rises whether First Bank’s onslaught against Nestoil is business competition.
Background
Nestoil, through its subsidiary Neconde Energy, operator of the OML 42 block under a 45:55 JV with the Nigerian National Petroleum Company Limited (NNPCL Upstream Company, NUC), is currently facing severe commercial pressure capable of derailing the strategic production upswing the company has recorded in recent years.
This pressure arises from an aggressive debt-enforcement drive by First Bank and its investment arms. Yet a closer empirical review of operations on OML 42 shows that Nestoil deserves institutional applause, national support, and a stable operating atmosphere, not a corporate ambush.
The story of OML 42 is a 12-year narrative marked by bureaucratic bottlenecks, operational stagnation, and ultimately, a dramatic turnaround driven by Nestoil’s persistence, technical competence, and capacity for large-scale engineering excellence.
Initial Long Gestation and Underperformance
When Neconde acquired OML 42 in 2011, the field was generally inactive, technically impaired, and burdened by aging infrastructure and degraded facilities.
From inception, Nestoil’s ability to upscale production was strangulated by the inefficient dual-operatorship arrangement imposed by the old government-controlled NNPC, whose bureaucracy frequently stalled decisions, procurement, and field execution.
What should have taken months took years; approvals delayed drilling campaigns, contracting cycles stretched endlessly, and operational alignment was nearly impossible. Yet despite all this, Nestoil stayed committed and kept the JV afloat.
The transformation of NNPC into a commercial NNPCL on July 1, 2022, removed many of these bottlenecks. The effects were immediate.
Industry data shows production hovered near 15,000 bpd in 2023, reflecting renewed operational freedom and steady system restoration.
FTSA Model Catalysing Growth – The Production Surge
A Financial & Technical Services Agreement (FTSA) between Neconde and NNPCL Upstream Investment Management Services (NUIMS), the NNPCL’s upstream subsidiary, repositioned Nestoil as the primary driver of field operations.
This FTSA triggered:
• Rapid facility rehabilitation
• Well workovers and re-entries
• Reconstruction of critical field infrastructure
• Onboarding of top-tier OEMs, including Schlumberger and Halliburton
By May 2025, Neconde successfully scaled OML 42 production to 50,000 barrels per day (bpd), doing about 5% of Nigeria’s crude oil production, a milestone that placed it among Nigeria’s fastest-growing indigenous upstream producers.
Plans now underway target:
• 70,000 bpd before year-end, and
• 120,000 bpd within four years, via infill drilling and new rig campaigns already mapped out.
Dormant fields like Egwa 2 have been revived, while others are in advanced stages of technical evaluation.
This growth trajectory shows that Nestoil has broken through the historic constraints that hampered OML 42, proving that the JV’s earlier underperformance was structural, not managerial.
Nestoil has always had the technical pedigree, having risen to become Nigeria’s No. 1 indigenous Engineering, Procurement and Construction (EPC) company, serving Shell, AGIP, and other International Oil Companies (IOCs) across multiple decades.
The Debt Dispute with First Bank – The Crux of the Matter
The timing of First Bank’s aggressive legal onslaught raises fundamental questions:
Why is the clampdown coming now, precisely when production figures have skyrocketed, and repayment capacity has never looked better?
According to a major investigation by the Nigerian Concord Newspaper, First Bank’s sudden aggression may not be unconnected with hidden business interests, which are evident in:
1. Dual Representation by a Key Lawyer — Potential Regulatory Capture
The Concord Newspaper reports that Babajide Koku, SAN, personal lawyer to First Bank Chairman, Femi Otedola, was simultaneously representing:
• FBNQuest Merchant Bank (a key creditor),
• First Trustees, and
• Nigeria Upstream Petroleum Regulatory Commission (NUPRC)
in cases directly affecting control of OML 42.
(Source: Nigerian Concord Newspaper, Nov. 26, 2025)
This dual legal representation is described by Concord as:
“A flashing red light for regulatory capture.”
— Nigerian Concord Newspaper
Industry experts interviewed by the newspaper warn that such representation could compromise regulatory independence and enable private interests to manipulate state institutions.
2. Otedola’s Alleged Pattern of Business Takeovers
Concord Newspaper accuses Femi Otedola of a pattern of using bank loans and judicial maneuvering to take over companies such as:
• Sahara Group, and
• General Hydrocarbon
through inflated loans, withheld documentation, and court-driven seizures.
(Source: Nigerian Concord Newspaper)
The newspaper alleges that Otedola had earlier approached Neconde to buy 16% of OML 42, a request that was declined, after which First Bank intensified actions against Nestoil.
3. Withholding of Bank Statements
Nestoil and Neconde reportedly informed the Concord Newspaper that First Bank:
• refused for over three years to release bank statements
• withheld reconciliation documents
• and failed to provide verifiable loan records
documents that would show whether any alleged debt is accurate.
(Source: Nigerian Concord Newspaper)
The Aggression – Legal Actions and Backfire
In October 2025, First Bank secured an ex parte Mareva injunction freezing Nestoil/Neconde assets over alleged debts of $1.01 billion and ₦430 billion.
However:
• The order expired automatically after 14 days.
• A federal court later confirmed the injunction no longer exists.
• Nestoil issued contempt notices for violations of a subsisting “status quo” order.
These events show that Nestoil is not evading obligations—it is actively using lawful means to resist what appears to be severe overreach by First Bank.
Economic Impact and Social Value
Job Creation
Nestoil/Neconde employs over 3,000 Nigerians, with plans for expanded hiring due to increased production.
Local Content & CSR
The FTSA model emphasizes:
• Community investments
• Training programs
• Local contractor participation
• Technology transfer through global OEMs
Contribution to National Output
With production jumping from 15,000 bpd to 50,000 bpd, Nestoil is a major contributor to Nigeria’s efforts to regain lost crude oil production capacity.
The company is crucial in helping Nigeria meet its OPEC quota after years of underperformance.
Long-Term Commitment
Rather than walk away from debt obligations, Nestoil is actively restructuring its loans across multiple banks, a responsible corporate stance.
Why First Bank’s Clampdown Will Backfire
1. Suspicion of Business Competition
Concord’s findings raise serious concerns that the First Bank-led action may be driven by private commercial ambition, not loan recovery.
(Nigerian Concord Newspaper)
2. National Interest at Risk
A forced takeover threatens:
• production stability
• investment confidence
• Nigeria’s crude oil supply chain
• employment levels
3. Sabotaging Local Capacity Development
Crippling a top indigenous operator contradicts national aspirations toward domestic leadership in upstream assets.
4. Misinterpretation of Business Risk
Production stagnation was caused by NNPC-era bureaucracy, not incompetence.
The current growth proves the underlying asset is viable under Nestoil’s leadership.
5. Regulatory and Ethical Red Flags
Dual representation by a lawyer tied to the bank chairman undermines due process and erodes confidence in regulatory fairness.
(Concord Newspaper investigation)
Commendations and the Way Forward
Productivity Boost
Nestoil deserves full commendation for increasing OML 42 output from 15,000 bpd to 50,000 bpd within two years.
Ethical Persistence
The company has followed due process in court and pushed for a transparent resolution.
Social Value
Nestoil significantly contributes to:
• job creation
• host community development
• national revenue
• Nigeria’s global energy competitiveness
Loan Restructuring
The rational path forward is renegotiation, not destruction:
• Banks recover funds
• Nigeria retains an indigenous success story
• Nestoil continues scaling production
This is the only win-win scenario.
Conclusion & Recommendation
The empirical, legal, and operational evidence overwhelmingly shows that Nestoil is a national asset worth protecting.
The company’s path from bureaucratic stagnation to 50,000 bpd is not just a corporate achievement; it is a contribution to Nigeria’s crude oil resilience, energy security, and economic recovery.
Rather than pursue punitive receivership, Nigeria’s financial regulators, oil authorities and business community must support Nestoil/Neconde, encourage loan restructuring, and safeguard the integrity of indigenous upstream operators.
Nestoil has earned its place as a pillar of local enterprise and technical excellence.
Nigeria stands to lose immensely if private interests are allowed to sabotage this progress.
It is time to back Nestoil, not break it.
—AWC Energy & Business Desk
