SOFAZ increased assets by 8pct
By Sara Israfilbayova
The assets of the State Oil Fund of Azerbaijan (SOFAZ) increased by 8.02 percent as of January 1, 2018, as compared to the beginning of last year ($33.147 billion) and amounted to $35.806 billion.
The Fund reported that the increase was mainly due to SOFAZ budget revenues, asset management activity and exchange rate effect of investment portfolio currencies.
The Fund’s revenues from managing assets of the Fund for January-December 2017 amounted to 1.083 billion manats ($637.02 million), while its extra-budgetary revenues related to the revaluation of foreign exchange totaled 876.2 million manats ($515.38 million).
Revenues of 11.053 billion manats ($6.5 billion) were received from implementation of oil and gas agreements, including 11.03 billion manats ($6.49 billion) from the sale of profit oil and gas, 23.9 million manats ($14.06 million) from transit operations, 2.4 million manats ($1.41 million) as bonus payments, 3.6 million manats ($2.12 million) as acreage payments and 17.9 million manats ($10.53 million) as transit payments.
As per 2017, budget of the Fund, 6.1 billion manats ($3.59 billion) were transferred to the state budget. The expenditures in the amount of 105 million manats ($61.76 million) were directed to financing the improvement of social-economic condition of refugees and internally displaced persons, 70 million manats ($41.17 million) were used for financing the reconstruction of the Samur-Absheron irrigation system.
Moreover, 20.5 million manats ($12.06 million) were directed to financing Baku-Tbilisi-Kars (BTK) railway construction and 17 million manats ($10 million) were directed to financing “The state program on the education of Azerbaijani youth abroad in the years 2007-2015.”
As much as 3.95 billion manats ($2.32 billion) were transferred to Central Bank of Azerbaijan (CBA) for preserving macroeconomic stability and 735.4 million manats ($432.56 million) for financing of the share of Azerbaijan in the construction of STAR Oil Refinery Complex.
The Fund’s administrative and operational expenses for the reporting period were 18.1 million manats ($10.65 million).
SOFAZ’s budget revenues for the period of January-December, 2017 reached 12.14 billion manats ($7.14 billion), while budget expenditures constituted 11.01 billion manats ($6.48 billion).
SOFAZ was established under the Presidential Decree, dated December 29, 1999, “On Establishment of the State Oil Fund of the Republic of Azerbaijan.”
The main purpose of the establishment of the Fund was to preserve and multiply the income derived from oil, create an excellent economic base, taking into account social needs, the requirements of economic progress and development of the country. Besides, the challenge ahead is to protect the country's economy from possible negative influences caused by the growth of foreign exchange earnings and avoidance of damage to financial discipline.
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