Lagos to get its first 13% oil derivation fund in December

Lagos to get its first 13% oil derivation fund in December

The Governor of Lagos State, 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, 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 derivation.

“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 his government 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.

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