Oil fund spending tops revenues
Azerbaijan`s State Oil Fund (SOFAR), the body that
holds revenues from the sale of oil, posted a profit of $300
million in 2008, according to the SOFAR executive director.
Shahmar Movsumov said that, while the global economic crisis resulted in a loss of $91 billion to such an experienced oil and gas exporter as Norway last year, Azerbaijan managed to avoid such losses due to the proper pre-emptive steps taken by the government.
However, as of April 1, the fund`s revenues made up 1.349 billion manats ($1.686 billion), while expenses were 1.398bn manats ($1.747bn). Movsumov provided a number of explanations for the minor shortfall.
"Due to sliding crude prices in world markets, the volume of revenues coming into the Fund has been reduced. On the other hand, SOFAR is meeting its state budget obligations and is making considerable transfers. Naturally, this is resulting in a certain short-term reduction. However, as of the end of this year, the fund`s means will not have dwindled and will at least be at the level they were early this year."
SOFAR is expected to transfer 4,915bn manats ($6.143bn) to the state budget in 2009. Movsumov pointed out that the amount of transfers is unaffected by fluctuations in world oil prices.
SOFAR currently maintains a fund of $10.864bn. The fund`s experts predict that the figure will rise by an additional $10 million by year-end. According to Movsumov, although the oil price was set at $70 a barrel in the country`s budget and crude prices remain well below that level, boosting production will allow SOFAR to transfer the planned revenues to the state.
Shahmar Movsumov said that, while the global economic crisis resulted in a loss of $91 billion to such an experienced oil and gas exporter as Norway last year, Azerbaijan managed to avoid such losses due to the proper pre-emptive steps taken by the government.
However, as of April 1, the fund`s revenues made up 1.349 billion manats ($1.686 billion), while expenses were 1.398bn manats ($1.747bn). Movsumov provided a number of explanations for the minor shortfall.
"Due to sliding crude prices in world markets, the volume of revenues coming into the Fund has been reduced. On the other hand, SOFAR is meeting its state budget obligations and is making considerable transfers. Naturally, this is resulting in a certain short-term reduction. However, as of the end of this year, the fund`s means will not have dwindled and will at least be at the level they were early this year."
SOFAR is expected to transfer 4,915bn manats ($6.143bn) to the state budget in 2009. Movsumov pointed out that the amount of transfers is unaffected by fluctuations in world oil prices.
SOFAR currently maintains a fund of $10.864bn. The fund`s experts predict that the figure will rise by an additional $10 million by year-end. According to Movsumov, although the oil price was set at $70 a barrel in the country`s budget and crude prices remain well below that level, boosting production will allow SOFAR to transfer the planned revenues to the state.
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