Nigeria: Lagos – Story of oil in the nation’s economic hub

Gov. Akinwunmi Ambode of Lagos State

Gov. Akinwunmi Ambode of Lagos State

29 August 2016, Abuja – In this report, George Okojie observes that with the recent discovery and consequent commencement of crude oil production in Lagos, the state is set to consolidate its economic dominance among its peers in Nigeria.

When Yinka Folawiyo Petroleum Company Limited, a wholly-owned indigenous firm embarked on the complicated process of looking for crude oil in Lagos State some 25 years ago many thought it was another grandstanding, a wild goose chase that will fizzle out without achieving the desired results.

However, the oil firm proved cynics and critics wrong when it, in partnership with Panoro Energy ASA and First Hydrocarbon Nigeria (FHN) Limited, among others, on May 3, 2016 achieved first oil on Aje field in western axis of the ancient town of Badagry.

Indeed, the discovery catapulted Lagos State into the league of oil and gas producing states in the country. Again, it is historical because the feat made Lagos the first basin out of the Niger Delta to become an oil producing state.

Shortly after the discovery, the Indices and Disbursement Committee of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) proclaimed the state as an oil producing state, in line with the constitutional provision.

According to the Chairman of the Committee, Alhaji Aliyu Mohammed the development was significant for the Nigeria economy that Lagos state has emerged as the first oil producing state outside the Niger Delta basin.

Mohammed affirmed that Committee had visited the state to verify crude oil and gas production from Aje Oil Wells for the purpose of disbursement of the 13 per cent Derivation Fund.

He said the Commission had set-up an Inter-Agency technical Committee comprising of the RMAFC, DPR, Office of the Surveyor General of the Federation and the National Boundary Commission to determine the location of the Aje Oil Wells.

Mohammed explained that the Technical Committee 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 of the Aje Oil Wells fall within 200m isobaths and therefore should be attributed to Lagos State.


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