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Six major oil and gas companies listed on the Nigerian Exchange (NGX) spent N613 billion servicing loans and other finance-related obligations in the first half of 2026, as the combined impact of foreign exchange (FX) losses and high interest rates continued to weigh on corporate earnings.
A Daily Sun analysis of the half-year financial statements of Aradel Holdings, Eterna, Japaul Gold and Ventures, Oando, Seplat Energy and TotalEnergies Marketing Nigeria showed that their combined net finance costs rose to N613.3 billion between January and June 2026. This represents a sharp increase from N182.2 billion recorded in the same period of 2025, an increase of about 237 per cent.
Although the companies remained profitable during the period, the figures show they are paying significantly more to service loans, especially foreign currency debts, leaving less money for expansion, dividends and other investments.
Industry analysts said the sharp increase was driven mainly by the depreciation of the naira and the high interest rate environment.
Many of the companies borrowed in US dollars to finance projects. As the naira weakened, the amount required to repay those loans in local currency increased substantially, even when the actual dollar loans remained unchanged.
At the same time, repeated increases in the Central Bank of Nigeria’s (CBN) Monetary Policy Rate (MPR) pushed commercial lending rates higher, making bank loans more expensive.
Companies that depend heavily on bank overdrafts and short-term facilities to finance operations were among the worst affected.
The bulk of the finance costs came from two companies.
Aradel Holdings recorded the highest finance cost at N326.14 billion, a huge jump from N11.08 billion in the corresponding period of 2025.
The increase was largely linked to higher borrowings used to expand production, the consolidation of newly acquired subsidiaries and accounting charges related to future oil field restoration obligations.
Despite the higher finance costs, Aradel still reported a 30 per cent increase in profit after tax to N191.04 billion.
Commenting on the company’s performance, the Chief Executive Officer of Aradel Holdings, Adegbite Falade, said:
“Our priorities for the second half of the year are unchanged: optimising our enlarged portfolio and improving operational efficiency.
Our enlarged portfolio provides more opportunities to generate stronger cash flow and returns for shareholders and unlocking that potential is our main focus.”
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Oando Plc posted the second-highest finance cost at N161.30 billion, compared with N12.97 billion in the first half of last year.
The company returned to a large finance cost after benefiting from one-off finance income and tax credits in 2025. Nevertheless, Oando still reported a profit after tax of N68.56 billion for the six-month period.
Unlike many of its peers, Seplat Energy managed to reduce its finance cost to N107 billion from N142.27 billion a year earlier. The improvement followed lower debt levels and stronger cash flow, even as production increased.
Seplat also delivered one of the strongest earnings performances, with profit after tax surging by 498 per cent to 164 million dollars (about N225.5 billion).
Among downstream operators, Eterna Plc saw its finance cost rise to N1.49 billion, up from N782.75 million a year earlier. Despite this, the company recorded an impressive turnaround, with profit after tax rising more than tenfold to N5.88 billion.
Japaul Gold and Ventures also experienced a sharp increase in finance costs, which climbed from N3.11 billion to N10.19 billion as the company borrowed more to support working capital.
TotalEnergies Marketing Nigeria reported a finance cost of N7.18 billion, compared with about N12 billion in the previous year under a different reporting format.
Although all six companies remained profitable, analysts warned that the rising cost of debt could become a major challenge if the current trend continues.
Higher finance costs reduce the cash available for expansion projects, dividend payments and debt reduction, particularly if crude oil prices decline or the naira weakens further.
Vice Chairman of the Board of Directors at Highcap Securities, David Adonri, said the nature of the petroleum business makes borrowing almost unavoidable.
“Petroleum business requires very huge working capital outlay which many operators cannot afford, hence the resort to bank credit. With escalation in cost of sales and operational costs, borrowing and attendant finance costs have increased astronomically,” he said.
The rising finance costs among listed oil firms reflect a wider trend across Nigeria’s economy, where high inflation, rising interest rates and exchange rate volatility have significantly increased the cost of borrowing.
Economists say that while expensive loans can slow investment and increase financial pressure on businesses, borrowing can still support long-term growth if the funds are invested in profitable projects such as oil production, gas processing, refining and other energy infrastructure.
For now, Nigeria’s listed oil companies continue to post healthy profits, but analysts believe investors will increasingly pay attention to how much of those earnings are being consumed by debt servicing as borrowing costs remain elevated.
