Obasanjo Demands Increase in 13% Derivation as $1bn Azikel Refinery Advances

Former President Olusegun Obasanjo has called for an upward review of the 13 per cent derivation allocated to oil-producing states, declaring that the current provision should serve as a starting point for further negotiations.

Obasanjo spoke on Monday at the inauguration of the Crude Distillation Unit (CDU) of the $1 billion Azikel Refinery in Obunagha, Yenagoa Local Government Area of Bayelsa State.

He backed calls for oil-producing states and communities to receive a greater share of the resources extracted from their territories, while commending Bayelsa State Governor Douye Diri for supporting the refinery project.

“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,” the former president said.

The Azikel Refinery, owned by Azikel Petroleum under the Azikel Group, is expected to produce 2.5 million litres of fuel and two million litres of diesel daily, alongside other petroleum products.

Obasanjo praised the president of Azikel Group, Azibapu Eruani, for driving the project, urging him to ensure its completion within the next 12 months.

He recalled laying the foundation for the refinery eight years ago, expressing satisfaction with the progress made since his previous visit to the site.

The former president also acknowledged the contributions of the African Finance Corporation (AFC) and the African Export-Import Bank (Afreximbank) to the project, calling for sustained financial and technical support.

He said completing the refinery within the proposed timeframe could create an opportunity to expand its capacity further.

Obasanjo also commended Diri for what he described as the effective use of funds accruing to Bayelsa State, citing projects across the state as evidence of development.

Refinery to Drive Niger Delta Industrialisation

Speaking at the ceremony, Eruani said the refinery would accelerate industrialisation in Bayelsa and the wider Niger Delta, while positioning the region as a major participant in Nigeria’s petroleum industry.

He described the installation of the crude distillation unit as a significant milestone towards completing the refinery, which he said was conceived to ensure that the Niger Delta became an active player in the oil and gas value chain.

Eruani also praised President Bola Tinubu for supporting indigenous refineries, saying their operations aligned with the Federal Government’s objective of improving the availability and affordability of petroleum products.

He expressed appreciation to the Bayelsa State Government, AFC and Afreximbank for their support towards the project.

Diri Renews Call for Greater Oil Revenue Share

In his remarks, Governor Diri said the refinery represented a significant step towards addressing the longstanding grievances of oil-producing communities over their limited participation in the petroleum industry.

He argued that communities supplying Nigeria’s crude oil should have a greater role in determining how the country’s natural resources are managed and processed.

Diri criticised the Land Use Act and the existing 13 per cent derivation arrangement, insisting that oil-producing states deserved a greater share of the benefits from resources extracted from their territories.

“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,” the governor said.

He added that the region was not seeking to take all the benefits for itself but wanted to participate more fully 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,” Diri said.

The governor described the refinery as an opportunity for Bayelsa residents to become more actively involved in the petroleum industry and urged young people to acquire the skills needed to benefit from the project.

He also stressed the importance of processing Africa’s natural resources within the continent, arguing that local refining and industrial development were essential to maximising the economic benefits of its resources.

Diri called on oil companies operating around the Gbarain and Obunagha areas to support the project by rehabilitating the road leading to the refinery.

Stakeholders Welcome Project

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 for the initiative.

Both said the refinery could improve the economic prospects of Bayelsa State, the Niger Delta and Nigeria through increased industrial activity and local processing of crude oil.

The inauguration of the crude distillation unit marks another milestone in the development of the $1 billion refinery, which is expected to strengthen domestic petroleum refining and expand the region’s participation in the oil industry.