By Francis Ajuonuma
Former President Olusegun Obasanjo and Bayelsa State Governor Douye Diri have declared that the 13 per cent derivation paid to oil-producing states is inadequate, calling for a better deal for communities and states whose resources sustain the nation’s oil economy.
Obasanjo described the current 13 per cent derivation as only a starting point, saying oil-producing states should continue to negotiate for an upward review.
The former president spoke yesterday at the inauguration of the Crude Distillation Unit (CDU) of the $1 billion Azikel Refinery at Obunagha, Yenagoa Local Government Area of Bayelsa State.
Diri, who also criticised the existing arrangement, said oil-producing communities deserved greater participation in the exploitation and utilisation of their God-given resources.
The governor said the refinery represented a significant step towards correcting the historical imbalance in which the Niger Delta produced crude oil but had limited participation in the downstream value chain.
Obasanjo said the state and oil-producing communities had not received a fair deal, while commending Diri for utilising the state’s resources for development.
“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.
The former president also commended Azikel Group President, Dr Azibapu Eruani, for initiating the refinery project and urged him to ensure its completion within the next 12 months.
He praised the African Finance Corporation and Afreximbank for their technical and financial support, calling for continued assistance to enable the refinery to become fully operational.
The $1 billion refinery, owned by Azikel Petroleum under the Azikel Group, is expected to produce 2.5 million litres of petrol and two million litres of diesel daily, alongside other petroleum products.
Eruani said the project would serve as a catalyst for the industrialisation of Bayelsa State and the wider Niger Delta, adding that it was conceived to make the region an active participant in the oil industry.
He described the refinery as the second-largest full-scale refinery in Nigeria and expressed appreciation to Obasanjo for returning eight years after laying its foundation to witness the installation of the CDU.
According to him, the installation marked a major stage in the completion of the refinery, which he said would create opportunities for the people and strengthen the region’s economic base.
Eruani also commended President Bola Tinubu for supporting indigenous refineries, saying the policy aligned with the Federal Government’s objective of making petroleum products available and affordable.
Diri said the establishment of the refinery justified years of agitation by the Niger Delta over what the region considers injustice in the oil industry.
He said oil-producing communities should not remain mere suppliers of crude while others derive most of the benefits from the resources extracted from their 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,” Diri said.
The governor also faulted the Land Use Act, arguing that the current arrangement, under which surface resources belong to states while resources beneath the ground are controlled by the Federal Government, was unfair.
“The Land Use Act is unfair. Surface resources belong to states but what lies underneath belongs to the Federal Government,” he said.
Diri added that the region was not demanding exclusive control of its resources but wanted to become a co-player in determining how they were exploited.
“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 said the refinery would enable Bayelsans to become major participants in the petroleum industry and urged youths to acquire the skills required to take advantage of opportunities expected to emerge from the project.
He also called for increased processing of African resources within the continent, saying value addition remained essential to ensuring that resource-rich communities and countries derived greater economic benefits.
Diri further urged oil companies operating around the Gbarain/Obunagha area to complement the state government’s efforts by rehabilitating the road leading to the refinery.
The Ibenanaowei of Ekpetiama Kingdom and Chairman of the Bayelsa State Council of Traditional Rulers, King Bubaraye Dakolo, and a board member of Azikel Petroleum, Dr Daru Owei, commended Eruani for the project, saying it would positively impact Bayelsa, the Niger Delta and the wider Nigerian economy.
