Former President Olusegun Obasanjo has backed calls for an increase in the 13 per cent derivation allocated to oil-producing states, saying the existing arrangement does not give the states and communities a fair share of the benefits from their natural resources.
Obasanjo spoke on Monday during the inauguration of the Crude Distillation Unit (CDU) of Azikel Refinery in Obunagha, Yenagoa Local Government Area of Bayelsa State.
The $1bn refinery project is owned by Azikel Petroleum, a subsidiary of Azikel Group. When fully operational, the facility is expected to produce 2.5 million litres of petrol and two million litres of diesel daily, alongside other petroleum products.
Obasanjo commended the President of Azikel Group, Dr Azibapu Eruani, for initiating the project and challenged him to ensure its completion within the next 12 months.
He also appreciated the refinery’s technical and engineering team, the African Finance Corporation (AFC) and Afreximbank for supporting the project.
The former president called for continued support to facilitate the completion of the refinery, noting that substantial progress had been made since his previous visit.
He also praised Bayelsa State Governor Douye Diri for supporting the project and utilising the state’s revenue for development initiatives.
“I have told Dr Eruani that I will be officially 90 years by next March. It means I will take the boarding pass soon.
“He has to make sure the project is completed before I exit,” Obasanjo said.
Addressing Diri, the former president said Eruani had consistently acknowledged the governor’s contribution to the refinery project.
“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. The most important thing is that even the little you have received, you have used it well,” he said.
Obasanjo reiterated his call for Eruani to complete the refinery within 12 months, adding that its production capacity could subsequently be doubled.
Speaking earlier, Eruani said the refinery would help drive industrialisation in Bayelsa State and the wider Niger Delta region.
He recalled that Obasanjo laid the foundation stone for the project eight years ago, describing the installation of the CDU as a major milestone towards its completion.
Eruani said the refinery was conceived to ensure that the Niger Delta became an active participant in Nigeria’s petroleum industry rather than remaining primarily a crude oil-producing region.
He described the facility as Nigeria’s second-largest full-scale refinery and commended President Bola Tinubu for supporting indigenous refining projects.
According to him, domestic refining aligns with the Federal Government’s vision of making petroleum products more available and affordable.
Eruani also expressed appreciation to Diri, the AFC and Afreximbank for their contributions to the project.
In his remarks, Diri said the refinery vindicated years of agitation by Niger Delta communities against what they consider injustice in the petroleum industry.
The governor argued that communities producing crude oil should become active participants in the industry and benefit more substantially from their natural resources.
He criticised the Land Use Act and the existing 13 per cent derivation formula, insisting that oil-producing states deserved a greater share of the resources generated from their territories.
“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.
He maintained that the region was not seeking to take all the benefits from oil production but wanted a meaningful role in decisions concerning its resources.
“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.
Diri expressed optimism that the refinery would enable more residents of Bayelsa to participate in the petroleum industry and benefit from the opportunities it could create.
He urged young people to acquire the technical and professional skills needed to take advantage of the expected employment and business opportunities.
The governor also stressed that African countries should process their natural resources locally to retain more economic value and promote industrial development.
He called on oil companies operating in the Gbarain and Obunagha areas to support the state government by rehabilitating the road leading to the refinery.
