The Oil & Gas Index of the Nigerian Exchange (NGX) closed 2025 as the weakest sector in a year of historic gains for the broader market. While the NGX All-Share Index soared 51 percent, the strongest performance in nearly two decades, the Oil & Gas Index slipped about 1.5 percent, the only major sector to end the year in the red.

By December, the index hovered around 2,670 points, moving within a 52-week range of roughly 2,324 to 3,030 points. The volatility reflected sideways trading, intermittent rebounds, and weak investor confidence. Early in the year, the sector fell 13.2 percent in the first four months, remaining down more than 10 percent by mid-year, even as banking, consumer goods, and industrial stocks rallied on strong earnings and inflation protection.

There were brief recoveries. Mid-year buying in Aradel Holdings, Eterna, and Seplat Energy pushed the index back to roughly 2,670 points by October, but gains were fragile and short-lived. Analysts attribute the sector’s struggles to persistent share price pressure, delayed financial reporting, dividend concerns, and uncertain cash flows, which diverted investor interest to faster-growing sectors.

While consumer goods surged 129 percent, industrials gained 59 percent, and banking rose 40 percent, oil and gas lagged behind, highlighting the widening gap between the energy sector and the broader market rally.

Among listed energy stocks, Seplat Energy stood out for resilience and structural strength. Supported by rising production volumes, stronger cash flows, and improved earnings visibility, Seplat remained relatively stable, delivering one of the strongest sector performances. Its operational efficiency and solid dollar revenues strengthened margins and supported dividends, helping stabilise the Oil & Gas Index amid broad sector weakness.

Aradel Holdings had a standout year, combining operational growth with strong stock market performance. Shares hit a 52-week high of around N869 in October before settling near N780 in January 2026. The company posted revenue of N199.9 billion in Q1, with profit after tax up 55 percent year-on-year. By nine months, revenue reached N538.8 billion, up 43 percent, driven by expanded production of crude oil, gas, and refined products. Interim dividends of N10 per share reflected both performance and shareholder confidence. Analysts cite Aradel’s diversified revenue streams, solid balance sheet, and strategic expansions as factors for continued upside potential.

Eterna Plc also had a dynamic year, with shares rising from N24.30 at the start of 2025 to a March high of N38 and a brief peak of N42.40, marking a 74.5 percent year-to-date gain. The company returned to profitability, posting Q1 revenue of N73.27 billion and net profit of N687 million. Despite some moderation later in the year due to margin pressures and Q3 revenue decline to N212.84 billion, Eterna launched a N21.52 billion rights issue, signaling confidence in future growth.

TotalEnergies Marketing Nigeria provided stability but limited growth. Its stock remained calm, reflecting predictable cash flows and strong downstream operations, but lack of expansion kept investor interest muted.

The Oil & Gas Index’s underperformance in 2025 illustrates a sector marked not by collapse, but by uneven performance, weak sentiment, and limited collective momentum. While individual companies like Seplat, Aradel, and Eterna delivered solid results, the broader sector failed to capitalize on Nigeria’s booming equity market, leaving it behind in an otherwise historic year.

As Nigeria’s oil and gas sector enters 2026 cautiously after a weak 2025, the NGX & Gas Index is expected to lag the Oilbroader market, with gains coming from a handful of strong performers rather than a broad rally.

Seplat Energy stands out, buoyed by rising gas revenue, strategic acquisitions, and steady dividends, making it a stabilizer amid sector volatility. Aradel Holdings impresses with upstream expansion, robust revenue growth, and investor-friendly policies, positioning it for further outperformance. Eterna Plc offers tactical upside, recovering profitability and attracting insider support, while mature players like TotalEnergies provide stability but limited growth.

“Macro tailwinds include improved investment incentives, upstream licensing, and gas infrastructure development, though global oversupply and price volatility remain headwinds,” Futureview analyst said.

Analysts say 2026 will reward operational strength, disciplined capital management, and strategic vision, rather than broad sector momentum.

Investors are advised to focus on selective winners, stocks with resilience, growth clarity, and dividend potential, while weaker peers may continue to underperform.

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