Obasanjo Backs Higher Derivation for Niger Delta, Flags Off $1B Azikel Refinery Unit
YENAGOA, NIGERIA — Former President Chief Olusegun Obasanjo has advocated for an upward review of the 13 percent derivation formula for Nigeria’s oil-producing states, describing the current benchmark as a mere starting point for future negotiations.
Obasanjo made the assertion on Monday during the official flag-off ceremony of the Crude Distillation Unit (CDU) at the $1 billion Azikel Refinery in Obunagha, Yenagoa Local Government Area of Bayelsa State.
The modular refinery project, developed by Azikel Petroleum under the Azikel Group, is designed to produce 2.5 million litres of petrol (PMS) and 2 million litres of diesel daily, alongside other essential petroleum products.
Lauding the President of Azikel Group, Dr. Azibapu Eruani, for driving the initiative, Obasanjo challenged the engineering team and management to ensure the refinery is fully completed within the next 12 months.
He also acknowledged the critical financial backing provided by the Africa Finance Corporation (AFC) and Afreximbank, urging international financiers to sustain their support.
“You are right that the states and oil-producing communities have not got a fair deal so far,” Obasanjo said, addressing regional leaders. “Thirteen percent 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.”
Speaking at the event, Dr. Eruani stated that the facility represents the second-largest full-scale refinery initiative in Nigeria and will serve as a catalyst for the industrialization of Bayelsa State and the broader Niger Delta region. Eruani commended President Bola Tinubu for creating an enabling environment for indigenous refining operations aligned with federal energy security goals.
Bayelsa State Governor, Senator Douye Diri, added that the private refinery validates decades of regional agitation against systemic injustice in the allocation of resource wealth.
Governor Diri reiterated his criticisms of the Land Use Act, calling it obnoxious, and maintained that surface and subsurface resource laws must be reformed to allow host communities to become equitable co-players in the sector.
