​13% Derivation Not Enough for Oil-Producing States, Says Obasanjo

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Former President Olusegun Obasanjo has backed calls for an increase in the 13 per cent derivation allocation to oil-producing states, stating that the current revenue-sharing formula should serve merely as a starting point for further negotiations.
​Obasanjo made the remarks on Monday during the flag-off of the Crude Distillation Unit at the $1 billion Azikel Refinery in Obunagha, Yenagoa Local Government Area of Bayelsa State.
​Addressing Bayelsa State Governor Douye Diri, the former president acknowledged that oil-producing states and host communities have not received a fair share from the exploitation of natural resources in their territories.
​“You are right that the states and oil-producing communities have not got a fair deal so far. Thirteen per cent is the beginning. You can continue to talk,” Obasanjo said.
​The former president also challenged the promoter of the refinery, Azibapu Eruani, to complete the 25,000-barrel-per-day facility within 12 months.
​“I have told Dr. Eruani that I will officially be 90 years old by next March. It means I will take the boarding pass soon. So, he has to make sure the project is completed before I exit,” he added.
​Obasanjo praised Governor Diri for the effective management of Bayelsa’s resources, noting that the state’s revenue was evident in completed infrastructure projects across the region.
​Governor Diri renewed his criticism of the derivation formula and the Land Use Act, arguing that Niger Delta communities remain excluded from decisions regarding resources extracted from their land.
​“The Land Use Act is unfair. Surface resources belong to states, but what lies underneath belongs to the Federal Government. That law is obnoxious and not good for any just society,” Diri said. “We do not want to take everything for ourselves. We just want to be co-players in determining how it is done. Thirteen per cent is not enough.”
​Diri urged local youth to acquire technical skills to participate in the refinery’s workforce and called on oil companies operating in the Gbarain-Obunagha axis to rehabilitate the access road leading to the plant.
​Speaking at the event, Eruani, President of Azikel Group, said the refinery was conceived to transition Bayelsa and the Niger Delta from raw crude exporters to active processors. Upon completion, the plant is expected to produce 2.5 million liters of petrol and two million liters of diesel daily.