The legal battle between Nestoil Group and a consortium of banks has taken a dramatic turn as Nestoil and Neconde move to pursue a $1.8 billion damages claim against FBNQuest Merchant Bank, First Trustees, Access Bank, their Receiver-Manager and others over alleged disruption of oil production operations.
The claim follows the collapse of an attempt by FirstBank and its affiliates to secure the reassignment of the ongoing case before the Federal High Court. The application was firmly rejected by the Honourable Chief Judge, who relied on the Supreme Court’s judgment in Neconde Energy Limited v. FBNQuest Merchant Bank Ltd & Ors., finding no basis whatsoever to remove the trial judge.
The Supreme Court had earlier criticised efforts to stall proceedings initiated by the lenders themselves, describing such conduct as suggestive of ulterior motives and an abuse of judicial process.
With the reassignment bid defeated, attention has now shifted to what could become one of the largest commercial damages claims in Nigeria’s oil and gas sector.
Nestoil and Neconde contend that actions by the banks and their Receiver severely disrupted operations, causing crude oil production to plummet from approximately 60,000 barrels per day to below 40,000 barrels per day, and derailing planned drilling activities involving the Pathfinder 500 drilling rig.
According to the companies, the resulting production losses, operational disruptions and commercial damage have generated losses estimated at $1.8 billion, for which they intend to seek compensation.
The dispute has also widened with Drawcok Estate Limited filing a separate N100 billion lawsuit against FBNQuest Merchant Bank, First Trustees, their Receiver and others, alleging the wrongful takeover and seizure of properties in Victoria Island, Lagos.
As multiple legal fronts open against the lenders, the controversy is rapidly evolving from a debt recovery dispute into a high-stakes legal confrontation carrying significant financial, commercial and reputational consequences for all parties involved.
