I May be acquiring a hybrid bike with an 8 speed Nexus hub. This bike has not been maintained throughout its life and although the bike is not a major problem-I have a few worries about the Nexus hub. It looks as though the bike has not seen any oil for a long time. Chain- and probably sprockets- is completely worn but the owner says he can only get 5 of the 8 gears. Haven't checked out by riding it but on the stand I can get all 8 gears.

So do these hubs need lubrication?- where? and what oil? That is my main concern as the rear wheel is covered in a rust film that looks as though it got there by oil that has dried out. There is NO oil film anywhere on the bike- let alone around that hub.

Don't want to put any work into the bike if the hub has had it.

They require oil. I would suggest replacement of the oil. I will look for a link detailing the procedure.

I must have a hazy memory. The information I can now find indicates grease not oil.

https://sheldonbrown.com/nexus-mech.html

Try this link. https://sheldonbrown.com/nexus8/ Tim

This thread has info
Shimano Nexus internal Hub reliability 8-speed

Thanks choteau. I guess I did remember correctly about oil.

These hubs are or were grease packed when new, but Shimano has recognized that oil lubrication delivers superior performance and durability. I attended a Shimano service clinic where the oil dip procedure was demonstrated, but of course they recommend their own (very expensive) oil.
Many people have reported good results using good old garden variety ATF.
I'm running a long term test case running an Alfine hub, essentially the same animal as your Nexus on ATF. The owner of this hub rides about 3,000 km per year. The first oil dip was done at 3,000 km, the second at 6,000. I anticipate doing the third oiling this fall at 9,000 km.
Here's a video I made while doing the second oiling. The process for your Nexus is identical with the exception that the drive side dust cover is pried out, it is not screwed on.
https://www.youtube.com/watch?v=lFOMD2q5-o4
I would also add that shifting issues with these hubs are almost always related to poor cable routing, or poor cable condition. I sold a ton of these hubs in my shop, and resolved shifting issues externally 100% of the time.