Economy Watch

Oil Derivation Fund: Lagos Receives N3.78bn in One Year

Governor Babajide Sanwo-Olu of Lagos State

The Lagos State government has said that it received N3.78bn between 2020-2021 as its share of 13 percent oil derivation fund from the Federal Government.

The Lagos State Commissioner for Energy and Mineral Resources, Biodun Ogunleye, disclosed this on Wednesday during a ministerial press briefing to mark the first year of the second term in office of Governor Babajide Sanwo-Olu in Ikeja.

Lagos became an oil-producing state in 2016, joining Abia, Akwa Ibom, Bayelsa, Delta, Edo, Imo, Ondo and Rivers, which are entitled to 13 per cent derivation fund.

According to Ogunleye, the state received N131m as part of oil derivation from the Federal Government between 2018-2019. This brings the total sum received by the state since becoming an oil-bearing state to N3.911bn.

It would be recalled that Yinka Folawiyo Petroleum Company Limited (YFP), a wholly-owned indigenous firm and operator of the OML 113 offshore Lagos, commenced production of crude oil from the field in 2016.

This came 25 years after the company was awarded an oil prospecting licence.

However, the commissioner said production has been hampered due to challenges.

He said: “Between 2018-2019, the state government received from the Federal Government’s N131 million as part of oil derivation. And, between 2020-2021, the Lagos State government received N3.78 billion.

“But the owners of the assets have been having issues among themselves. And as long as they could not produce, there would be no money for Lagos.

“The state government is engaging them to ensure that they return to the field. And we hope that before the end of the year, they will find new technical partners and they can go back to production.”

Speaking on community electrification programme, Ogunleye said that Sanwo-Olu has approved the procurement of 20,000 units of prepaid metres for low income communities in the state.

“Approval was further expanded to utilise funding to catalyse full metering across the state via collaborations with electricity Distribution Companies in Lagos and a leading smart metering solution company , ElSewedy Electric,” the commissioner said.

He decried the increasing death rate from gas explosions in the state, informing that the government will soon come up with measures to regulate the operation of Liquefied Petroleum Gas (LPG) vendors in the state.

Source: The Whistler




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