Lagos State can now benefit from the thirteen percent derivation accruing to oil producing states in the country, even as the Federal Government says four of the five oil wells discovered belong to the state.
The government added that the location of the fifth well fell outside the approved distance and as such could not belong to the state.
Chairman, Indices and Disbursement Committee, Revenue Mobilisation Allocation and Fiscal Commission, Alhaji Aliyu Mohammed, explained that the disproved oil well fell beyond 200 metres isobaths and could not have legitimately belonged to Lagos State.
Mohammed stated this yesterday at the Lagos Governor’s office, Lagos House, during the visit of a delegation of the committee, stressing that the delegation was in the state for the purpose of verifying crude oil and gas production from the recently discovered Aje oil wells.
The committee chairman said 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.
Mohammed noted that as part of procedure and in pursuant to its constitutional mandate, the commission set up an inter-agency technical committee which comprised the commission, the Department of Petroleum Resources, Office of the Surveyor General of the Federation and the National Boundary Commission to determine the location of the Aje oil wells.
“The technical committee recommended that for the purpose of derivation as spelt out under Section 162 (2) of the 1999 Constitution (as amended), as well as the provision of the Allocation of Revenue Act, 2004, Aje oil wells 1, 2, 4 and 5 fall within the 200m isobaths and therefore should be attributed to Lagos State.
“As a result, the commission and members of the inter-agency committee had to embark on this working visit to conclude the process. Please, note that Aje oil well 3 falls beyond the 200m isobaths and therefore cannot be legitimately attributed to Lagos State.”
He pointed out that the commencement of oil production from Aje oil field by Yinka Folawiyo Petroleum Company Limited was the first time oil was being produced outside the Niger Delta.
Responding, Governor Akinwunmi Ambode described the visit as historic, pointing out that the visit marked the beginning of the official step that would take Lagos to the final destination as an oil-producing state.
“The discovery of oil in Lagos State is significant for Nigeria. It is the first time that oil would be produced outside the Niger Delta.
“It means that a new path to diversification is what we are now witnessing. We will also encourage other states to start activating their mineral deposits to expand the Internally Generated Revenue,” he said.
