Oil production: Lagos gets first 13% derivation fund December
The Governor of Lagos State, Mr. Akinwunmi Ambode, has said the state
expects to get its first derivation fund following the first export from
the Aje oil field located offshore Lagos.
Ambode disclosed this on Tuesday in Lagos at this year’s
Annual International Conference and Exhibition of the Nigerian
Association of Petroleum Explorationists.
Yinka Folawiyo Petroleum Company Limited, a wholly owned
indigenous firm and operator of the OML 113, had on May 3 announced the
commencement of crude oil production on the Aje field.
Oil-producing states are entitled to 13 per cent derivation fund from the Federation Account.
The governor, who was represented by the Commissioner for
Energy, Mr. Wale Olowu, said, “I am pleased to announce that the first
export from the Aje oil field has happened. That is not the big deal;
the big deal is that Lagos State is anxiously awaiting its first
derivation in December. So, in December, we will be collecting our first
“We cannot wait to see a lot of oil and gas come under the
soil of Lagos because it will help us in the area of employment; it will
help us in the area of electricity generation, which we want to do
off-grid anyway, and it will also help us in making sure that our
revenue continues to be diversified.”
Ambode said they would continue to work to make Lagos the
investment and oil and gas hub of the nation, adding, “We reassure all
of you stakeholders in the industry of our commitment to provide a safe
and secure environment for exploration activities that is consistent
with global best practice.”
He said the state was also closely monitoring and “getting
ready to massively support other Oil Prospecting Licences in Lagos to
make sure they can quickly transform to Oil Mining Leases”.
He said the state had established its own oil and gas
corporation called Ibile Oil and Gas, which, he said, would open for
business by next month.
Ambode said the company would be involved in exploration, development, and production, among others.
He said, “We also want the development of the oil and gas
industry in Lagos. We didn’t plan it originally. But now that we are
seeing the evolution, we are doing everything possible to bring them
together because on our west coast, we have found oil.
“On the east coast, we already have Dangote refinery that is
the largest in Africa and one of the largest in the world, and then in
our centrals, we have the banks that can finance, the oil tank farms and
then we have the seaport for export.”
According to the Federal Government, four of the five Aje oil wells discovered in Lagos belong to the state.
The Chairman, Indices and Disbursement Committee, Revenue
Mobilisation Allocation and Fiscal Commission, Alhaji Aliyu Mohammed,
said during a recent visit of a delegation of the committee to the Lagos
State Government that the verification by the committee and its
recommendation would facilitate the disbursement of 13 per cent
derivation fund to the state in line with the Nigerian Constitution.