Kogi State governor, Usman Ododo, has demanded the payment of 13 per cent derivation from the federation account in line with its status as an oil-producing state.
He said Kogi had discovered crude oil in commercial quantity in the Olamaboro Local Government Area of the state.
He, however, lamented that despite the discovery of crude oil in commercial quantity in Kogi, the state does not enjoy the 13 per cent derivation and other benefits given to other oil-producing states in the country.
Governor Ododo stated this when he visited the Minister of Petroleum Resources (Oil), Heineken Lokpobiri, at his office on Thursday in Abuja.
Speaking in his address, he said, “We are aware that the Nigerian Upstream Petroleum Regulatory Commission has a lot to do to develop the frontier basin.
“There are funds to develop it. We are happy with our colleagues in the South-South when they are going home with tons of money, while we go home with little. We are happy for them, but we hope to join them.
“Some people call an oil-producing state. Yes, we are an oil-producing state, but are you producing? No. Because of insecurity. We have fought and ensured there is peace in the area. Once there is peace, then people can come in to invest.
“As a state, we can’t do it alone. We need you to help us so that the states can fully utilise what God has given us. It’s on that note that that is the major one that you need to help us. Some people believe we earn 13 per cent. It’s not monthly.
“We only received it once, and that was N7.8m. As a government, we have to be proud that we are also oil producing but nothing is coming.
“And people believe if you are oil producing and nothing is coming, as a governor, what are you going to do? As a state, we are ready to have a state-owned oil block. Our sons and daughters are in that industry. They are ready to work with us as long as we put in place the right mechanism.”
Oil producing states in the country receive 13 per cent derivation as a benefits transfer scheme as stipulated in Section 162, Sub-section 2 of the Nigerian Constitution.
States enjoying this privilege include Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Imo, Ondo, and Rivers.
The derivation fund is paid to states every month to assist oil-producing communities in combating environmental pollution and degradation, providing basic amenities such as healthcare and potable water, among others.
In the first half of 2024, nine oil-producing states shared a total of N341.59bn from the federation account.
The governor called for the support of the ministry in Kogi’s bid to plug into the northern front-line exploration oil drilling bid.
According to Ododo, Kogi is the meeting point between the South and the North of the Ajaokuta/Kaduna/Kano pipeline which gives it a major advantage for oil and gas investments to thrive.
Ododo also announced that the government had commenced payment of the newly approved minimum wage to all cadre of civil service.
“As of today, we are the first state to begin the implementation of the minimum wage. We started with 72,500.
“And after our own, you can see all other states struggling to also announce. It is not a competition. It is what the Governor decided to do.
“And just yesterday, all our civil servants received the minimum wage, and they are happy. And they will be happier seeing the Governor here today. Because they believe the Governor now is trying to expand the resources of the state for the betterment of all of us.”
Responding in his address, the Minister of Petroleum Resource said the Federal Government, through the Nigerian Upstream Petroleum Regulatory Commission, is looking into the matter as Nigeria needs more crude oil and gas assets to increase its revenue from the current target of 2.5 million barrels per day to about 5 million barrels.
He, therefore, added that the government will certainly partner with Kogi State in its current drive.
He said, “The derivation money is a question of what quantum you produce, but it shows that Kogi has joined the League of Oil Producers.
“So what is left to be done is to partner with the government of Kogi State so that we use the Frontier Exploration Fund to do a requisite exploration where there could be a lot of seismic work done, where we will find more fields in Kogi and play big with the League of States that are earning fat from derivation. And so we, as the government, you know, are committing to working very closely with the government of Kogi State to achieve this.”
He also stated that the ministry is working to increase oil production, which will, in turn, increase revenue allocation to the three tiers of government.
“All countries are making efforts, they are doubling their efforts towards ensuring that they increase production. So Nigeria can never be an exception. And that was why, a few days ago, you know, NUPRC is organising a program, which was a product of our consultation, where they said they want to increase production by one million barrels.
“And I told them that one million barrels is too small. We can do a lot better than that.
“So our ambition here as government is to see how we can make the necessary investments so that there will be more money for all the three tiers of government. Because this is a federation asset. Whenever we increase production and the money comes in, it goes to the federation account.
“And it is distributed to all tiers of government. And that is why we don’t want to delay our effort towards ensuring that we are up on production.”
