SOFAZ planning to decrease expenditures
By Aynur Jafarova
Azerbaijan’s state oil fund SOFAZ is working out a mechanism for decreasing its expenditures.
This measure is taken to ensure the sustainability of the fund’s development in the coming years, SOFAZ Head Shahmar Movsumov told Trend Agency.
He noted the global decrease in oil prices will negatively affect the revenues of SOFAZ. In this regard, SOFAZ is working out various scenarios to balance its revenues.
The decrease in oil prices is continuing acorss the globe. Currently, the price per a barrel of oil (depending on the grade of oil) is approximately $60 in the world markets, while prior to the continuous decrease, this figure exceeded $110 per barrel.
“Given that SOFAZ has some financial obligations to the state budget, as well as to certain financing the social and strategically important projects, it may reduce its funds for a short-term,” Movsumov added.
The revenues of SOFAZ amounted to 13,600,400,100 manats and spendings totaled 12,302,663,500 manats in 2013. But its budget revenues and spendings were forecasted to hit 11,626,943,400 manats and 10,590,034,800 manats, respectively in 2014.
SOFAZ’s revenues and spendings totaled 10,131,900,000 manats and 8,041,200,000 manats, respectively in the third quarter of 2014.
Movsumov went on noting that SOFAZ revenues for the entire period of its activity totalled $117.2 billion.
He said the total expenditures of SOFAZ for the entire period of its activity amounted to $80.1 billion.
The assets of SOFAZ increased by 3.98 percent and exceeded $37,305,300,000 as of October 1, 2014, compared to early 2014 (around $35,877,500,000).
SOFAZ, an entity that accumulates and manages Azerbaijan's oil and gas revenues, was established in 1999 with an asset worth $271 million.
The main goals of the fund include accumulation of revenues, investment of assets abroad to minimize negative impacts on economy, prevention of the 'Dutch disease', ensuring savings for future generations, and maintaining the current social and economic standards in the country.
Since the first quarter of 2012, the fund started purchasing gold. The amount of its purchased gold reached to 30 tons 175 kg (970,146 ounces) as of April 1.