RMAFC visits Lagos  to assess request for 13% oil derivation     

Lagos is inching close to further boosting its revenues as the Indices and Disbursement Committee of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) is in the state to assess the four Aje Oil Wells in Badagry as a prelude to granting the state right to share from the 13 percent derivation fund exclusive to the nine oil producing states of the federation.

Governor Akinwunmi Ambode of Lagos State sometime in May wrote to the Federal Government requesting that Lagos be recognised and accorded the privilege of drawing from the constitutionally backed 13 percent derivation fund. This followed the discovery of crude oil in Badagry after years of persistent search by Tunde Folawiyo Petroleum Company Limited, an indigenous oil firm.

Aliyu Mohammed, chairman of the committee, spoke to journalists, Wednesday, after he led other members to visit Governor Ambode at the State House, saying they are in Lagos to verify crude oil and gas production from the Aje oil wells for the purpose of disbursement of the 13 percent derivation to the state “in line with the constitution of the Federal Republic of Nigeria.”

According to Mohammed, the commission had set-up an inter-agency technical committee comprising of the RMAFC, Department of Petroleum Resources (DPR), Office of the Surveyor General of the Federation and the National Boundary Commission to determine the location of the Aje oil wells.

He said that the technical committee had recommended that for the purpose of the derivation fund, as spelt out under section 162 (2) of the 1999 Constitution as well as the provision of the allocation of revenue act 2004, number 1, 2, 4 and 5 , the Aje oil wells fall within 200m isobaths and therefore should be attributed to Lagos State.

The visit, therefore, he explained, is the fallout of the decision of the commission and members of the inter-agency committee, to physically assess the oil wells and location to conclude the process.
“It is important to state that the commencement of oil production from Aje oil field by Yinka Folawiyo Petroleum Company Limited is the first time oil is being produced outside the Niger Delta basin and therefore of a significance in diversifying the source of crude and gas production in the country,” Mohammed said.

Yinka Folawiyo Petroleum Company Limited, a wholly-owned indigenous firm and operator of the OML 113 offshore Lagos, in April this year announced the commencement of production of crude oil from the field. The company is partnering New Age Exploration Nigeria Limited, EER (Colobus) Nigeria Limited, Pan Petroleum (Panoro Energy) Aje Limited and PR Oil & Gas Nigeria Limited in the exploration.

The company said the inauguration of the Front Puffin Floating Production, Storage and Offloading vessel was successfully completed after its arrival in Nigeria on March 16, 2016.
Oil produced from the Aje field will be stored on the Front Puffin, which has production capacity of 40,000 barrels of oil per day and storage capacity of 750,000 barrels, according to the firm.

States currently enjoying the 13 percent derivation fund include Akwa Ibom, Bayelsa, Rivers, Delta which account for 80 percent of crude oil production in the country, as well as Cross River, Imo, Abia, Anambra and Ondo accounting for 20 percent. With the entry of Lagos, 10 states are now within the bracket.

Ambode said the crude oil production in Lagos would greatly enhance the economy of not just the state but the nation in general.