FG Approves Four Oil Wells, 13% Derivation for Lagos

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  •  Says Aje 3 cannot be legitimately attributed to the state

Gboyega Akinsanmi

The federal government has said that four of the five oil wells discovered in Badagry legitimately belong to Lagos State, for which the state would be entitled to 13 per cent derivation from the Federation Account.

However, it disclosed that Aje 3 oil well falls beyond the 200-mile isobaths and therefore cannot be legitimately attributed to the state.

The Chairman of the Indices and Disbursement Committee, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Alhaji Aliyu Mohammed, disclosed this during a working visit to the state governor, Mr. Akinwunmi Ambode, at the State House, Alausa, wednesday.

Mohammed visited the governor alongside other members of the committee comprising Mr. Ken Kayama, Ambassador Polycap Azige, Alhaji Bello Usman Maitambari, Dr. Rafiq Ogunbambi and Mrs. Martina Odom.
Mohammed said the revenue allocation commission set up an Inter-Agency Technical Committee which comprised the commission pursuant to its constitutional mandate.

He explained that the main purpose of the working visit was to verify crude oil and gas production from the Aje oil wells for the purpose of disbursement of 13 per cent derivation to the state in line with the constitution.
The chairman explained that the commission and members of the technical committee had “to embark on this working visit to conclude its assignment”.

He added that the technical committee comprised representatives from the Department of Petroleum Resources (DPR), Office of the Surveyor General of the Federation and the National Boundary Commission (NBC) to determine the location of the Aje oil wells off the Badagry coast.

He said the technical committee recommended that “for the purpose of derivation as spelt out under Section 162 (2) of the constitution, as well as the Allocation of Revenue (Abolition of Dichotomy in the Application of Derivation), Act, Aje oil wells 1, 2, 4 and 5 fall within the 200-mile isobaths and therefore should be attributed to Lagos State”.
Based on the findings of the technical committee, however, Mohammed confirmed that Aje 3 oil well falls beyond the 200-mile isobaths and therefore could not be legitimately attributed to Lagos State.

He added that the commencement of oil production from the Aje oil field by Yinka Folawiyo Petroleum Company Limited was the first time oil is being produced outside the Niger Delta basin and therefore of major significance in diversifying the source of crude oil and gas production in the country.

In his remarks, Ambode said that the commencement of crude oil production in the state would in no small measure enhance the economy of not just the state, but the nation in general.

He said it was significant for the Nigeria economy that the state had emerged as the first oil producing state outside the Niger Delta basin, describing the visit of the technical committee as remarkable in the annals of Lagos.
The governor said the working visit signalled the official step that has taken the state to the final destination that makes it an oil producing state. “We are very glad to receive this delegation,” he added.

“We thank the federal government, especially President Muhammadu Buhari for making this happen very promptly. This has been the quickest action that has been taken by RMAFC since I have known the commission.

“I used to be the state accountant general. So I had a lot of transactions and a relationship with the institution called RMAFC. Within a span of about 60 days after we wrote our letter and even before we wrote the letter, this technical committee was set up.

“It gladdens me that the institution works and is working for the good of Nigeria,” he said.
Ambode commended members of the DPR and NBC, saying both institutions “have contributed immensely to the process of the discovery and production of crude oil in Lagos”.

He said the discovery of hydrocarbon resources in Lagos had kick-started the path to the diversification of oil production in Nigeria, urging other states “to activate the mineral deposits in their domain as a means of boosting internally generated revenue (IGR)”.

He added: “It will also give us revenue independence in a manner that there would be equal growth in all the nooks and corners of Nigeria.

“I am happy RMAFC has taken this step. Other states should engage in activities that will allow them to activate whatever mineral deposits they have in the various states in conjunction with the federal government, so that we can start to diversify revenue and growth and then create balanced growth and development for the whole country.”