Aradel Holdings and Seplat Energy paid a combined ₦1.13 trillion in taxes in the first half of 2026, a figure that underscores how dramatically Nigeria's indigenous energy sector has expanded and how much of that expansion the government is capturing through the petroleum profit tax regime, even as the gap between pre-tax and post-tax profit at both companies raises questions about how much of an oil boom actually reaches shareholders.

Aradel's tax charge alone stood at ₦561.7 billion for the six months ended June 30, 2026, up from ₦44.9 billion in H1 2025, a 1,151% increase that reflects the combination of dramatically higher pre-tax earnings and the punishing effective tax rate applied to upstream petroleum profits. The charge converted a pre-tax profit of ₦752.71 billion into a post-tax profit of ₦191 billion, an effective tax rate of approximately 74.6%, meaning the government collected three naira for every naira Aradel's shareholders kept.

Seplat's tax bill for the same period was approximately ₦568 million on a dollar basis, translating to roughly ₦568 billion at prevailing exchange rates, bringing the two companies' combined tax payment to approximately ₦1.13 trillion. Seplat's H1 2026 results separately showed profit after tax surging 498% to $164 million, with revenue reaching $1.82 billion, driven by the full consolidation of SEPNU assets and elevated crude prices during the Hormuz crisis period.

The scale of the tax charges is a function of how petroleum profit tax works in Nigeria. Unlike the standard corporate income tax rate of 30%, PPT levies rates of up to 85% on production-sharing contracts and 65% on other upstream arrangements, depending on the field and fiscal terms under the Petroleum Industry Act. For a company like Aradel, which has rapidly expanded its upstream footprint through the acquisition of ND Western and increased exposure to Renaissance Africa Energy, the enlarged asset base that drove revenue 577% higher also pulled a significantly larger portion of earnings into the highest-taxing brackets.

Aradel's revenue grew to ₦2.49 trillion from ₦368.08 billion in H1 2025, with crude oil generating ₦1.98 trillion, accounting for approximately 79% of total revenue, while gas contributed ₦512.10 billion and refined products generated ₦129.44 billion. Finance costs also jumped sharply to ₦326.1 billion from ₦11.1 billion, driven by higher bank borrowing interest and the unwinding of decommissioning provisions, compressing the pre-tax profit line before the tax charge delivered its own further reduction.

The result for Aradel shareholders is striking in its arithmetic: a company whose revenue grew nearly seven-fold year-on-year, whose operating profit crossed ₦1 trillion for the first time, and whose pre-tax profit nearly quadrupled delivered a post-tax profit improvement of just 30.5%. The tax regime that took ₦561.7 billion in six months absorbed the overwhelming majority of the uplift from the oil boom.

Aradel's net debt fell 70% to ₦46.5 billion and cash reserves rose above ₦1.7 trillion, providing the financial flexibility the company says it needs to optimise its enlarged portfolio and improve operational efficiency in the second half. With Brent crude now retreating from its July highs above $100 per barrel toward the low-to-mid $80s following Trump's nuclear deal overtures to Iran, the second-half earnings trajectory for both companies will depend heavily on where oil prices settle once the geopolitical noise clears.

The ₦1.13 trillion combined tax payment from two companies in six months is, depending on your vantage point, either the strongest possible evidence that Nigeria's fiscal terms are working as intended, or the clearest illustration of why indigenous upstream companies struggle to compound shareholder returns at the pace their operating performance would otherwise suggest. For the Federation Account, it is an extraordinary windfall from an oil boom the government did not produce. For Aradel and Seplat shareholders, it is the price of doing business in Nigeria's most profitable and most taxed industry simultaneously.

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