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 serve 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. He said oil-producing states and communities had not received a fair share of the benefits from resources extracted from their territories.
Bayelsa State Governor, Douye Diri, also criticised the existing derivation formula and the Land Use Act, arguing that oil-producing communities remained disadvantaged despite the wealth generated from their resources. He called for greater participation by host communities in decisions concerning the management of natural resources.
The Azikel Refinery, promoted by Azikel Group, is designed to process 25,000 barrels of crude oil daily. Obasanjo challenged the group’s president, Azibapu Eruani, to complete the facility within 12 months, describing the project as an opportunity to boost industrialisation and economic development in the region.
Eruani said the installation of the crude distillation unit marked the beginning of the refinery’s completion phase. The facility is expected to produce petrol, diesel and other petroleum products.
Obasanjo also acknowledged the support of the African Finance Corporation and the African Export-Import Bank towards the project, urging them to sustain their assistance.
Meanwhile, Diri called on young people in Bayelsa to acquire relevant skills to benefit from employment opportunities the refinery could create. He also urged oil companies operating in the area to support the rehabilitation of the road leading to the facility.
The governor stressed the need for Nigeria and other African countries to process more of their natural resources locally to retain greater economic benefits and expand industrial development.
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