Former President Olusegun Obasanjo has backed calls for an increase in the 13 per cent derivation allocation to oil-producing states, saying the existing share should be treated as a starting point for further negotiations.
Obasanjo spoke on Monday at the flag-off of the Crude Distillation Unit of the $1bn Azikel Refinery in Obunagha, Yenagoa Local Government Area of Bayelsa State, where he also challenged the project’s promoter to complete the facility within 12 months.
Addressing Bayelsa State Governor Douye Diri, the former president said oil-producing states and communities had not received a fair deal from the exploitation of 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,” he said.
The remarks came as Diri renewed his criticism of the derivation formula and the Land Use Act, arguing that communities in the Niger Delta remained excluded from decisions concerning the resources extracted from their land.
The refinery, owned by Azikel Petroleum under the Azikel Group, is designed to process 25,000 barrels of crude oil daily.
Its foundation was laid by Obasanjo about eight years ago, while the installation of the crude distillation unit marks a major stage in the project’s development.
Obasanjo commended the President of Azikel Group, Azibapu Eruani, for sustaining the project and urged him to ensure its completion within the next year.
“I have told Dr Eruani that I will be officially 90 years 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 said.
He also acknowledged the role of the African Finance Corporation and the African Export-Import Bank in supporting the investment, calling for continued assistance to bring it to completion.
“My challenge to you, Dr Eruani, is to ensure that the refinery is completed within the next 12 months. With this done, you can even double the capacity,” Obasanjo said.
The former president also praised Diri for what he described as the effective use of Bayelsa’s revenue, citing projects across the state as evidence that the funds accruing to it had been put to use.
“The most important thing is that even the little you have received, you have used it well,” he said.
In his remarks, Diri said the refinery represented an opportunity for residents of Bayelsa and the Niger Delta to participate more directly in an industry built on resources extracted from their communities.
