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Aradel Holdings and Seplat Energy generated a combined ₦1.54 trillion in pre-tax profit during the first half of 2026.
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Aradel’s current tax charge almost matched its entire pre-tax earnings following the consolidation of ND Western
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Despite the tax burden, investors continue to favour both companies, driving Aradel and Seplat to nearly ₦7.2 trillion in combined market value gains this year.
August 6, (THEWILL) — Nigeria’s listed upstream oil companies are delivering some of their strongest earnings in recent years, but the Federal Government is taking a sizeable share through taxes.
Financial statements released by Aradel Holdings and Seplat Energy show the companies generated a combined pre-tax profit of about ₦1.54 trillion in the first half of 2026.
However, total income tax expenses amounted to roughly ₦1.13 trillion, representing about 73 per cent of their combined earnings before tax.
The figures illustrate the impact of Nigeria’s petroleum fiscal regime even as elevated crude prices and improved production continue to support industry profitability.
Aradel, Seplat Face Heavy Tax Burden
Aradel posted pre-tax profit of ₦752.7 billion during the period. Although its total tax expense settled at about ₦564 billion after deferred tax adjustments, the company’s current tax charge stood at ₦748.1 billion, just ₦4.6 billion below its entire pre-tax profit.
The sharp increase followed the completion of Aradel’s acquisition of an additional 40 percent stake in ND Western Limited at the end of 2025, raising its ownership to 81.67 percent and expanding its taxable earnings base.
Seplat also reported a sizeable tax bill. The company recorded pre-tax profit of $574.9 million, equivalent to about ₦790.4 billion using its reporting exchange rate.
Total tax expense came to approximately ₦564.9 billion after deferred tax adjustments.
The company attributed much of the tax burden to Nigeria’s petroleum fiscal regime, with taxable earnings remaining substantially higher than accounting profit despite the transition of most onshore assets to the Petroleum Industry Act framework.
Oando’s Tax Story Differs
Unlike Aradel and Seplat, Oando’s bottom line was strengthened by tax.
The company reported profit after tax of ₦68.56 billion only after recognising an income tax credit of ₦101.4 billion, largely arising from the reversal of Companies Income Tax provisions previously recognised between 2023 and 2025.
Without the tax credit, Oando would have remained in a pre-tax loss position despite improvements in its underlying operations.
Investors Focus Beyond Taxes
The heavy tax bills have done little to dampen investor appetite for upstream oil stocks.
The NGX Oil and Gas Index has gained 96.32 per cent year-to-date, making it the Nigerian Exchange’s best-performing sector.
Aradel’s share price has climbed 127.88 per cent this year, adding about ₦3.72 trillion to its market value, while Seplat has advanced 99.45 per cent, increasing its market capitalisation by roughly ₦3.40 trillion.
Oando, however, has declined 8.96 per cent over the same period despite returning to profitability.
The contrasting performances suggest investors remain focused on production growth, cash generation and long-term earnings potential rather than the immediate impact of taxation, even as the latest half-year results show government continues to claim a significant portion of the sector’s profits.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
