The federal government has promised to increase crude exploration in Kogi to enable it to consolidate as an oil producing state.
The minister of state, Petroleum Resources, Heineken Lokpobiri gave this assurance when the state governor, Usman Ododo paid a courtesy visit to the minister in Abuja on Thursday.
Speaking with the minister, Ododo emphasised the necessity for partnership between Kogi state and the federal government to expedite investment in the exploration of the crude oil.
He lamented that despite the discovery of crude oil in commercial quantities in Kogi, the state does not enjoy the 13 per cent derivation and other benefits given to other oil-producing states in the country.
He called for the support of the ministry in Kogi’s bid to plug into the northern frontier basin oil exploration fund operated by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC)
The governor also requested for the establishment of a gas industrial park to leverage on the Ajaokuta/Kaduna/Kano (AKK) pipeline project, which gives it a major advantage for oil and gas investments to thrive.
“We are aware that the NUPRC, which is under you, has a lot to do to develop the frontier basin. There are funds to develop it. As a state, we are ready with your support to even have a state-owned oil block within our area where we can bring in investors,” the governor said.
Responding, Lokpobiri said the federal government is looking into the matter as Nigeria needs more crude oil and gas assets to increase its revenue from the current target of 2.5 million barrels per day to about five million barrels.
The minister stated that the Petroleum Industry Act mandates the NUPRC to explore frontier basins and pledged the federal government’s determination to deploy funds to unlock new discoveries and facilitate oil exploration in the state.
“We are doing a bid round currently, and as a policy, states are encouraged to participate in the upstream, all you need to do is to do the requisite exploration work towards getting oil in the substantial quantity.
“As a confluence state, the Ministry of Petroleum Resources will partner with the state government to provide necessary support to extract its resources to the markets,” he said.
Oil producing states in the country receive 13 per cent derivation as a benefits transfer scheme as stipulated in Section 162, Sub-section 2 of the Nigerian Constitution.
The derivation fund is paid to states on a monthly basis to assist oil-producing communities in combating environmental pollution and degradation, providing basic amenities such as healthcare, potable water, among others.
Kogi State became the first oil-producing state in Northern Nigeria following the affirmation of the discovery of oil in commercial quantities by the federal government in 2022.
