Oil producing states: FG okays 13% derivation fund for Lagos

agos State Governor, Mr. Akinwunmi Ambode (right), presenting a State plaque to Chairman, Indices & Disbursement Committee, Federal Revenue Mobilisation Allocation and Fiscal Commission, Alhaji Aliyu Mohammed during the Committee’s courtesy call to the Governor at the Lagos House, Ikeja


The Federal Government, yesterday, announced the approval of four of the five Aje Oil wells, discovered in Lagos State and disclosed plans to commence disbursement of 13 per cent derivation fund to the state as an oil producing entity.

Chairman, Indices and Disbursement Committee of the Revenue Mobilisation Allocation and Fiscal Commission, RMAFC, Alhaji Aliyu Mohammed, disclosed this during a courtesy visit to Governor Akinwunmi Ambode in Alausa, Ikeja.

Disbursement Committee of the Revenue Mobilisation Allocation and Fiscal Commission, RMAFC, Alhaji Aliyu Mohammed, disclosed this during a courtesy visit to Governor Akinwunmi Ambode in Alausa, Ikeja.



The visit of RMFAC was sequel to a letter sent by Governor Ambode to President Muhammadu Buhari a few months ago, seeking the inclusion of Lagos on the list of oil producing states to qualify it for payment of 13 per cent derivation fund.

Mohammed noted that the request of the governor prompted the set-up of an Inter-Agency Technical Committee, comprising RMAFC, DPR, Office of the Surveyor-General of the Federation and the National Boundary Commission, to determine the location of Aje Oil Wells.


He explained that the committee’s visit to Lagos was aimed at verifying crude oil and gas production from Aje Oil Wells for the purpose of disbursement of the 13 per cent derivation fund to the state, in line with the constitution of the Federal Republic of Nigeria.

“Aje Oil wells 1, 2, 4 and 5 fall within the 200 miles Isobath-a line on a map that connects all points that have same depth below water surface, and, therefore, should be attributed to Lagos State. But Aje 3 cannot be claimed by the state,” he said.


Explaining the reason Lagos lost the oil well, Mohammed said due to “the purpose of derivation as spelt out under section 162 (2) of the 1999 constitution and the provisions in Allocation of Revenue (Abolition of Dichotomy in the application of derivation) Act 2004, Aje 3 oil well falls beyond the 200 miles isobaths and, therefore, cannot be legitimately attributed to Lagos State.”

Consequently, he said the commission and members of the Inter-Agency Committee had to embark on the working visit to the oil wells to conclude the process, adding that the visit would promote national unity as well as the socio-economic development of Lagos State and Nigeria. Mohammed said: “It is also 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.

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