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Buhari reviews 13% derivation to oil-producing states

Buhari reviews 13% derivation to oil-producing states

President Muhammadu Buhari

* flags off oil, gas road map

President Muhammadu Buhari is presently reviewing the application of 13 per cent derivation allocation to the oil producing states, says Minister of state for Petroleum Resources, Dr.Ibe Kachikwu.

Kachikwu, who disclosed this in Abuja during an interview with journalists shortly after the president launched the sector’s policy road map, noted that the move is part of Federal Government’s plans to address the issues confronting the Niger Delta.

The Petroleum Sector Policy Road Map which was launched at the Presidential Villa is tagged: “The 7 Big Wins.”
Kachikwu said the Federal Government would be reaching out to the state governors in order to ensure that funds are channelled to the core areas where oil is produced.

“The president is also reviewing the proposal we gave him to look at how the 13 per cent derivation is applied. Right now it is a budgeting tool for state governments. We are going to be appealing to them to begin to put that into the core areas of the oil producing communities. And not just see it as a budgeting number,” he said.

According to him, all stakeholders including the president, the minister from the states and security chiefs would meet on Tuesday with about 50 leaders of the Niger Delta, in order to tackle the lingering crisis in the region.

He noted that the Federal Government would be launching a $10 billion infrastructure rebirth programmes in the region by installments.

The minister noted that the fund, which will be released in installments, would not come strictly from the Federal Government, but also from individuals, interested international organisations and state governments. Kachikwu said the Niger Delta state governors will have to meet to decide which cross border infrastructure the fund would be expended on.

He said: “Finally, we are also launching $10 billion infrastructural rebirth investment programmes in the Niger Delta region. This is not money that is going to come strictly from the federal government. It is going to come from investors, individuals, who are ready to do private sector infrastructure, obviously states and federal governments as the case may be and international organisations that have shown interest to help.

“What is more important is not the number but the conceptual alizarin of the process. It is a fact that governors will have to come together from the region to begin to look at cross state interests, whether there will be railways, whether there will be power facilities, whether there will be specialist hospitals or whatever.”
Kachikwu said government was also looking into the amnesty programme towards its wind up in about a year.

He added that the issue with the programme is that people have taken it to be “a social collection point… We are going to be looking at issues like coastal control and Niger Delta subsidiary policing and paramilitary types of organisations.”

He further noted that the government would also address the issue of funding for those that are ready to go into private businesses.

The 7 Big Wins were Policy and Regulation, Business Environment and Investment Drive, Gas Revolution, Refineries and Local Production capacity, Niger Delta and Security, Transparency and Efficiency and Stakeholder Management & International Co-ordination.

Owing to the plans to remove the crisis in the region, the ministry has now targeted zero closure of oil facilities by next year, unless for technical challenges.

Kachikwu revealed that the issue of security in the Niger Delta will cease being the responsibility of the military to become that of the oil companies, in line with international practices.

Buhari, at the occasion, said oil and gas remains a critical enabler for the successful implementation of the budget.

The President explained that the sector was also the source of funds for laying a strong foundation for a new and more diversified economy as well as take care of foreign exchange requirements.

He said the task before the Petroleum Resources Ministry was to maximise the potentials and opportunities across the whole range of oil and gas industry to stimulate the economy despite the current economic challenge.

According to him, this would require creativity, innovation, technology and robust partnership amongst various stakeholders.

He said there was also the dire need to instill a new culture of transparency and efficiency in the industry, streamline operations along the best practitioners by championing and implementing strategic reforms at every layer of the industry.

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