Bayelsa State Governor, Douye Diri, and former President Olusegun Obasanjo at the inauguration of the Crude Distillation Unit of the $1bn Azikel Refinery in Obunagha, Yenagoa.
Bayelsa State Governor, Senator Douye Diri, has renewed calls for an increase in the 13 per cent derivation allocation to oil-producing states, arguing that the current arrangement does not give the Niger Delta adequate benefits from its natural resources.
Diri spoke on Monday at the inauguration of the Crude Distillation Unit of the $1bn Azikel Refinery at Obunagha, Yenagoa Local Government Area, where former President Olusegun Obasanjo challenged the project’s promoter, Dr Azibapu Eruani, to complete the facility within 12 months.
The governor said oil-producing communities continued to bear the environmental and social costs of extraction without commensurate benefits, urging the region to become more involved in petroleum processing and industrial development.
“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.
He said the agitation for resource justice had continued for decades because oil-producing communities believed they were not receiving adequate benefits from the resources extracted 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.
Diri criticised the existing resource-control framework, particularly the Land Use Act and the derivation formula, arguing that oil-producing states deserved a greater say in managing their natural resources and distributing the benefits.
“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.
He added, “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.”
The governor described the refinery as an important step towards expanding the Niger Delta’s participation in the petroleum value chain, commending Eruani and the Azikel Group for investing $1bn in the project.
He urged Bayelsa youths to acquire technical and vocational skills to prepare for employment opportunities expected to arise when the refinery becomes operational.
Diri also called on oil companies operating in the Gbarain-Obunagha area to rehabilitate the road leading to the refinery, stressing the importance of supporting infrastructure to industrial development.
Earlier, Obasanjo commended Eruani for his vision and entrepreneurial courage, expressing satisfaction with the progress recorded since he laid the refinery’s foundation stone eight years ago.
The former president challenged the Azikel Group president to complete the facility within the next 12 months, expressing hope that it would become operational 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.
He also backed calls for an increase in the 13 per cent derivation allocation to oil-producing states, describing the current percentage as a starting point for further discussions.
“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 commended Diri for supporting the project, noting that Eruani had consistently acknowledged the governor’s contributions during their discussions.
He also praised the African Finance Corporation and the African Export-Import Bank for their financial support, alongside the technical and engineering teams working on the project.
The 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, alongside other refined petroleum products.
The Crude Distillation Unit is a key component of the facility, separating crude oil into fractions for further processing.
When completed and operational, the refinery is expected to expand domestic refining capacity, create jobs, stimulate supporting businesses and promote local value addition in the petroleum sector.
In his address, Eruani said the project was conceived to transform the Niger Delta from a region associated mainly with crude oil production and export into a centre for refining and industrial development.
He described the inauguration as a major milestone and thanked President Bola Tinubu, Diri, the financial institutions, contractors and technical partners for supporting the project.
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, also commended Eruani for the investment.
They expressed optimism that the refinery would contribute to economic growth in Bayelsa, the Niger Delta and Nigeria by expanding industrial activity and creating opportunities for local participation in the petroleum industry.