FG moves to ensure equitable 13% derivation fund distribution, re-verifies oil wells

The Federal Government has moved to ensure equitable distribution of the 13% derivation fund among oil-producing states through the re-verification of disputed and newly drilled oil and gas wells.

The development followed the inauguration of the reconstituted Inter-Agency Technical Committee (IATC) by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), according to a press statement issued by the Commission on Saturday, September 19, 2026.

The committee is expected to verify disputed and newly drilled oil and gas wells from 2017 to date as part of efforts to strengthen fiscal transparency, equitable revenue allocation and institutional integrity in Nigeria. The exercise is also expected to address concerns raised by states over the coordinates, boundaries and mapping of oil and gas wells.

What he is saying

The RMAFC Chairman, Dr. Mohammed Bello Shehu, said the exercise was in line with the Commission’s constitutional mandate to monitor accruals to and disbursement of revenue from the Federation Account. He emphasised that the verification would contribute to ensuring equitable distribution of the 13% Derivation Fund among oil and gas-producing states.

• Shehu explained that the Commission discarded the previous draft report on the oil and gas wells verification exercise following several claims, counterclaims and complaints from various states.
• He said the concerns centred largely on the need to re-verify the coordinates of disputed and newly drilled wells and accurately plot the verified coordinates on approved maps.
• The reconstituted IATC is expected to ensure that every verified coordinate, map utilised and boundary evaluated reflects the actual situation on ground.
• Shehu directed the committee to consider relevant court decisions, rely strictly on approved maps and undertake physical field verification of affected oil and gas wells where necessary.

The verification exercise is therefore expected to provide a fresh technical basis for determining the oil and gas wells that qualify for consideration in the derivation revenue allocation process.

RMAFC Sets Up Two-Tier Verification

To improve efficiency and accountability, Shehu disclosed that a two-tier governance structure had been established for the exercise. The structure is designed to separate technical verification and field activities from strategic oversight and final approval.

• The first tier comprises technical officers and subject-matter experts from RMAFC, the Office of the Surveyor-General of the Federation (OSGoF), the National Boundary Commission (NBC), and the Nigerian Upstream Regulatory Commission (NUPRC).
• The technical team will undertake ground-level verification, field inspections, technical analysis and initial report drafting.
• The second tier will be the Executive Committee, led by the Commission’s leadership, which will provide strategic direction, ensure inter-agency coordination and oversee final approvals.
• Surveyors-General from affected states and representatives of the Senate Committee on Petroleum Resources (Upstream) will participate as observers to promote transparency.

RMAFC will also provide the committee with institutional support, including engagement with relevant security authorities to facilitate administrative clearances, tactical assistance and security coverage during field operations in complex and coastal environments.

What you should know

Nairametrics reported in August this year that 11 oil-producing states shared N321.90 billion in the first quarter of 2026 under Nigeria’s 13% derivation formula.

The report, based on BudgIT Nigeria’s data on 13% oil derivation sharing among 11 oil-producing states, stated that six states in the Niger Delta received nearly 90% of the oil-producing states’ allocation in the three months ended March 31, 2026.

The allocation data compiled by BudgIT from the National Bureau of Statistics (NBS) and the Federation Accounts Allocation Committee (FAAC) showed a sharp concentration of funds among a handful of states.

The latest re-verification exercise is therefore focused on establishing accurate technical records of disputed and newly drilled oil and gas wells, which will form part of the information used in determining derivation allocations.