Obasanjo Advocates Fairer Deal For Oil-Producing Communities

Former President of Nigeria, Chief Olusegun Obasanjo, has advocated an increase in the 13 per cent derivation fund allocated to oil-producing states, describing the existing arrangement as a starting point that could be negotiated upwards to ensure greater benefits for the Niger Delta region.

Hotnews reports that Obasanjo made the call on Monday during the flag-off ceremony for the installation of the Crude Distillation Unit (CDU) of the $1 billion Azikel Refinery at Obunagha in Yenagoa Local Government Area of Bayelsa State.

The 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.

The former president commended the President of Azikel Group, Dr. Azibapu Eruani, for initiating the project and urged him to ensure its completion within the next 12 months.

He also acknowledged the contributions of Governor Douye Diri, the African Finance Corporation (AFC) and Afreximbank towards the realisation of the refinery.

Obasanjo praised Governor Diri for the utilisation of Bayelsa’s resources, noting that the state’s development projects demonstrated the importance of applying available funds to meaningful development initiatives.

He maintained that although oil-producing states and communities deserved a fairer deal in the distribution of oil revenues, the existing 13 per cent derivation allocation could serve as a foundation for further negotiations.

In his remarks, Dr. Eruani described the refinery as a major step towards industrialisation in Bayelsa State and the wider Niger Delta region.

He recalled that Obasanjo laid the foundation for the project eight years ago, expressing delight that the former president returned to witness the installation of the CDU, which he described as a significant milestone towards completing the facility.

Eruani also commended President Bola Tinubu for supporting indigenous refinery projects, noting that the initiative aligned with the Federal Government’s objective of making petroleum products more available and affordable.

Governor Diri, in his address, said the establishment of the refinery represented an important opportunity for oil-producing communities to participate more actively in the petroleum industry.

He reiterated his position that the 13 per cent derivation allocation was inadequate and called for a review of the existing arrangement to ensure that host states and communities received greater benefits from their natural resources.

The Governor also criticised the Land Use Act, arguing that the current legal and revenue-sharing framework limited the ability of oil-producing communities to benefit adequately from the resources beneath their land.

Governor Diri emphasised the need for Africa to process its natural resources locally rather than depend primarily on exporting raw materials, noting that domestic processing would create employment, stimulate industrial growth and improve economic opportunities.

He urged Bayelsans, particularly youths, to acquire the necessary skills to benefit from the employment and business opportunities the refinery is expected to generate.

The Governor also appealed to oil companies operating around the Gbarain-Obunagha area to support the state government’s development efforts by rehabilitating the road leading to the refinery.

Meanwhile, Dr. Daru Owei, a board member of Azikel Petroleum, and the Ibenanaowei of Ekpetiama Kingdom and Chairman of the Bayelsa State Council of Traditional Rulers, King Bubaraye Dakolo, commended Eruani for the initiative.

They expressed optimism that the refinery would contribute to economic growth, industrial development and employment generation in Bayelsa State, the Niger Delta and Nigeria at large.

The progress of the Azikel Refinery project has raised expectations that the facility will strengthen local refining capacity, create opportunities for indigenous participation in the petroleum industry and contribute to the economic transformation of the Niger Delta.

~ Hot News Reporters
Tuesday 13, October, 2026