Azernews.Az

BAKU – Assets of Azerbaijan’s state oil fund Sofar, the body that holds revenues from the country’s crude exports, increased 13.3 percent in the first quarter of 2011 to almost $25.8 billion, according to its head Shahmar Movsumov.

Movsumov told a news conference Tuesday that the figure is expected to reach $30 billion by the end of the year.

Sofar’s revenues totaled nearly 3.26bn manats ($4.126bn), while expenses made up 1.4bn manats ($1.772bn) as of April 1. The fund transferred $1.683bn to the state budget in January-March.

Sofar’s executive director said that the increase in world crude prices has driven up the fund’s revenues. He noted that whereas the price of oil was initially estimated at only $60 a barrel in Azerbaijan’s 2011 budget, the figures for Q1 indicate that it has risen to an average of $95 in world markets.

The Sofar head said further that discussions are underway on increasing budgetary expenses. "As a result of these discussions, we are expecting an increase in Sofar’s transfers to the state budget."

The resource-rich South Caucasus republic established the State Oil Fund in 1999, and Sofar’s assets equaled only $271 million at the time.

Sofar’s funds are to be used to finance construction and upgrade of strategic infrastructure facilities and resolve other issues of nationwide importance. In 2001-2009, Sofar focused on financing both the country’s oil sector and the development of the non-oil economy and infrastructure projects. Sofar is currently funding a number of key projects in a slew of fields including transport and irrigation.

Sofar’s priorities include countering "the Dutch syndrome" by placing its funds abroad in order to minimize adverse impact on the Azerbaijani economy, and to support economic and social development in the country.