Former President Olusegun Obasanjo has supported calls for oil-producing states to receive a larger share of revenue from petroleum resources, describing the existing 13 per cent derivation allocation as a starting point for further discussions.
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 said oil-producing communities had yet to receive what he considered a fair share of the benefits generated from resources extracted from 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.
His comments came as Diri renewed calls for a review of the derivation formula and criticised the Land Use Act, arguing that oil-producing communities should have a greater role in decisions about the resources found on their land.
Obasanjo Sets 12-Month Completion Target for Refinery
Beyond the debate over resource allocation, Obasanjo challenged Azikel Group President Azibapu Eruani to complete the refinery within the next 12 months.
The project, owned by Azikel Petroleum, is designed to process 25,000 barrels of crude oil daily. Obasanjo laid its foundation approximately eight years ago, while the installation of the crude distillation unit represents a significant stage in its development.
The former president praised Eruani for sustaining the project and urged him to maintain progress towards 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,” he said.
Obasanjo also acknowledged the support of the African Finance Corporation and the African Export-Import Bank, encouraging continued assistance to bring the investment to completion.
He commended Diri for projects undertaken across Bayelsa State, saying the governor had made effective use of the revenue available to the state.
Diri Demands Greater Community Participation
In his address, Diri argued that the Niger Delta had not received sufficient benefits from the exploitation of its petroleum resources.
The governor said the region’s concerns extended beyond the amount allocated through the derivation formula to the question of who controls and benefits from the resources extracted from local communities.
“As people of the Ijaw ethnic nationality, we have protested and fought because we feel that God gave us something in our land but we are not benefiting from it. Others are benefiting and see us as second-class citizens,” Diri said.
He also criticised the Land Use Act, arguing that the distinction between state authority over surface land and federal control of resources beneath it disadvantaged oil-producing communities.
Diri maintained that the region was not seeking to retain all the proceeds from its natural resources but wanted a greater role in determining how those resources were managed.
“We do not want to take all to ourselves. We just want to be co-players in determining how it is done. Thirteen per cent is not enough for the states,” he said.
The governor also urged young people in Bayelsa to acquire technical and professional skills that would enable them to secure opportunities at the refinery and other industrial facilities.
He called on oil companies operating around Gbarain and Obunagha to repair the road leading to the refinery, saying their intervention would complement the state government’s efforts.
Diri further advocated greater local processing of Africa’s natural resources, arguing that expanding industrial activities within the continent could help producing countries retain more economic value.
Azikel Refinery Expected to Produce Petrol and Diesel
Eruani said the refinery was conceived to make Bayelsa and the wider Niger Delta more active participants in the petroleum industry, rather than relying mainly on supplying crude oil.
He described the installation of the crude distillation unit as the beginning of the project’s completion phase and said the facility was expected to contribute to industrial development in the region.
According to the project’s promoters, the refinery is expected to produce 2.5 million litres of petrol and two million litres of diesel daily, alongside other petroleum products.
Eruani also commended President Bola Tinubu for supporting indigenous refining projects, saying their development aligned with efforts to improve the availability and affordability of petroleum products.
Other dignitaries at the event included Azikel Petroleum board member Daru Owei and King Bubaraye Dakolo, the Ibenanaowei of Ekpetiama Kingdom and chairman of the Bayelsa State Council of Traditional Rulers.
They praised the project and expressed hope that it would improve the economic prospects of Bayelsa, the Niger Delta and Nigeria.
The refinery’s planned capacity, expected output and completion timeline remain project targets outlined by its promoters and officials at the event….Read more