Bayelsa State Governor, Douye Diri, has called for an upward review of the 13 per cent derivation allocation to oil-producing states, insisting that the current arrangement fails to adequately compensate the Niger Delta for its natural resources.
Diri made the demand on Monday during the inauguration of the Crude Distillation Unit of the $1bn Azikel Refinery in Obunagha, Yenagoa Local Government Area of Bayelsa State.
The event also featured former President Olusegun Obasanjo, who urged the refinery’s promoter, Dr Azibapu Eruani, to complete the project within the next 12 months.
Speaking at the ceremony, Diri said communities in the Niger Delta continued to suffer the environmental and social consequences of oil exploration without receiving benefits commensurate with the resources extracted from their land.
He maintained that oil-producing states should have a greater role in decisions concerning resource management and revenue distribution, while encouraging increased investment in refining and industrial activities within the region.
“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.
The governor noted that the struggle for resource justice had persisted for decades, driven by the perception among oil-producing communities that they had been denied a fair share of the wealth generated from their territories.
“It has been a long journey to be part of what God has given to us under our soil,” the governor added.
He faulted the existing legal and fiscal framework governing natural resources, particularly the Land Use Act and the derivation formula, arguing that the system restricted oil-producing states from exercising sufficient control over their resources.
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.
Diri stressed that the region was not seeking to appropriate all revenues from its resources but wanted a meaningful role in determining how they were managed and shared.
“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.”
Describing the refinery as a significant investment in the Niger Delta’s economic development, the governor praised Eruani and the Azikel Group for committing $1bn to the project.
He urged young people in Bayelsa to pursue technical and vocational training to position themselves for employment opportunities when the facility becomes operational.
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Diri also appealed to oil companies working in the Gbarain-Obunagha area to repair the road leading to the refinery, emphasising that adequate infrastructure was necessary to support industrial growth.
Obasanjo, in his remarks, praised Eruani for his entrepreneurial drive and commitment to the project, expressing satisfaction with the progress made since he laid its foundation stone eight years ago.
He challenged the Azikel Group president to ensure the facility was completed within a year, expressing optimism that operations would begin before his 90th birthday in March 2027.
“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 former president also supported the call for an increase in the derivation allocation to oil-producing states, describing the existing 13 per cent provision as an initial step towards securing a more equitable arrangement.
“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 further commended Diri for his support for the refinery, noting that Eruani had repeatedly acknowledged the governor’s contributions during their discussions.
He also recognised the financial backing provided by the African Finance Corporation and the African Export-Import Bank, alongside the efforts of the engineering and technical teams involved in the project.
The Azikel Refinery, owned by Azikel Petroleum, a subsidiary of Azikel Group, is designed to produce 2.5 million litres of petrol and two million litres of diesel daily, in addition to other refined petroleum products.
Its Crude Distillation Unit serves as a critical component of the facility, separating crude oil into different fractions for subsequent processing.
Upon completion and commencement of operations, the refinery is expected to strengthen Nigeria’s domestic refining capacity, generate employment, encourage the growth of supporting businesses and increase local value addition in the petroleum industry.
Earlier, Eruani said the project was conceived to reposition the Niger Delta from a region primarily known for crude oil extraction and exports into a hub for refining and industrial development.
He described the inauguration of the unit as an important achievement in the project’s development and expressed gratitude to President Bola Tinubu, Diri, the supporting financial institutions, contractors and technical partners.
Also speaking, a board member of Azikel Petroleum, Dr Daru Owei, and the Ibenanaowei of Ekpetiama Kingdom and Chairman of the Bayelsa State Council of Traditional Rulers, King Bubaraye Dakolo, praised Eruani for undertaking the investment.
They expressed confidence that the refinery would boost economic activity across Bayelsa, the Niger Delta and Nigeria by expanding industrial development and creating opportunities for greater local involvement in the petroleum value chain.