Former President Olusegun Obasanjo has backed calls for an increase in the 13 per cent derivation allocation to oil-producing states, describing the existing share 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.
Addressing Governor Douye Diri, the former president acknowledged that oil-producing states and communities had not received a fair share of the benefits 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,” he said.
Diri had renewed his criticism of the derivation formula, arguing that the current allocation was insufficient to address the concerns of oil-producing communities in the Niger Delta.
The governor also faulted the Land Use Act, which he said contributed to the region’s limited control over resources extracted from its land.
“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 maintained that the region was not seeking to take all the proceeds from its natural resources but wanted a greater role in decisions concerning their management.
“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 added.
The former president’s remarks came as he challenged the promoter of the Azikel Refinery, Azibapu Eruani, to complete the facility within 12 months.
Obasanjo said the refinery’s foundation was laid about eight years ago and urged Eruani, president of Azikel Group, to ensure the project becomes operational 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 support of the African Finance Corporation and the African Export-Import Bank, urging them to sustain their assistance towards completing the project.
“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 refinery, owned by Azikel Petroleum under the Azikel Group, is designed to process 25,000 barrels of crude oil daily.
According to the project promoters, the facility is expected to produce 2.5 million litres of petrol and two million litres of diesel daily, alongside other petroleum products.
Diri said the refinery offered Bayelsa and the wider Niger Delta an opportunity to participate more directly in an industry built on resources extracted from their communities.
He argued that the division of control between surface resources managed by states and underground resources controlled by the Federal Government placed oil-producing communities at a disadvantage.
“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,” he said.
The governor urged young people in Bayelsa to acquire the technical skills required to benefit from the refinery and other industrial investments, warning that local residents could miss out if they lacked the necessary expertise.
He also called on oil companies operating around Gbarain and Obunagha to rehabilitate the road leading to the refinery, saying they should complement the state government’s efforts to support the project.
Eruani said the refinery was conceived to make Bayelsa and the Niger Delta active participants in the petroleum industry rather than remain primarily suppliers of crude oil.
He described the installation of the crude distillation unit as the beginning of the facility’s completion phase, adding that the project was expected to support industrialisation and create economic opportunities in the region.
Eruani also commended President Bola Tinubu for supporting indigenous refineries, saying their development aligned with the Federal Government’s objective of improving the availability and affordability of petroleum products.
Obasanjo, meanwhile, praised Diri for what he described as the effective use of Bayelsa’s revenue, citing development projects across the state.
“The most important thing is that even the little you have received, you have used it well,” he said.
A board member of Azikel Petroleum, Daru Owei, and the Ibenanaowei of Ekpetiama Kingdom and Chairman of the Bayelsa State Council of Traditional Rulers, King Bubaraye Dakolo, also commended Eruani, expressing optimism that the refinery would improve the economic fortunes of Bayelsa, the Niger Delta and Nigeria.
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