SOFAZ reveals budget figures for Q1 2015

By Aynur Karimova  - AzerNews 

Azerbaijan's state oil fund SOFAZ has revealed its budget figures for January-June 2015. The fund reported on July 23 that its revenues in the reported period reached 4.054 billion manats ($3.863 billion), as its expenditures stood at 4.042 billion manats ($3.852 billion).

Oil and gas agreements contributed to 3.812 billion manats ($3.633 billion) worth of revenue, including 3.802 billion manats ($3.623 billion) profit from the sale of oil and gas, 5.7 million manats ($5.43 million) from transit payments, 2.1 million manats ($2 million) from bonus payments, and 2.2 million manats ($2.1 million) from acreage fees.

The revenues acquired from the management of the fund’s assets from January to June 2015 amounted to 241.9 million manats ($231 million), while its extra-budgetary revenues after the revaluation of foreign exchange totaled over 8.013 billion manats ($7.636 billion).

SOFAZ transferred around 3.562 billion manats ($3.394 billion) to the state budget per the 2015 budget.

The fund's expenditures in the amount of 89.8 million manats ($85.6 million) were allocated to improving the socio-economic conditions of refugees and internally displaced persons; 46.5 million manats ($44.3 million) went to financing the reconstruction of the Samur-Absheron irrigation system; 17.2 manats ($16.4 million) to financing Baku-Tbilisi-Kars railway construction; and 5.9 million manats ($5.62 million) to financing the state program on the education of Azerbaijani youth abroad for the period 2007-2015.

Some 307.4 manats ($293 million) were directed to financing the Southern Gas Corridor project. The fund's administrative and operational expenses for the reporting period were 13.7 million manats ($13.1 million).

As of July 1, 2015, SOFAZ’s assets have decreased by 3.56 percent, compared to the beginning of 2015, standing at over $35.783 billion.

SOFAZ, which is engaged in the accumulation and management of oil and gas revenues, was established in 1999 with assets worth $271 million.

The main purpose of the fund is to minimize negative impacts on the economy by directing capital at assets abroad, preventing so-called 'Dutch disease,' ensuring national savings for future generations, and maintaining the current social and economic standards in the country.

SOFAZ assets are placed partly in securities and partly in money market instruments.

According to SOFAZ's investment strategy, up to five percent of its investment portfolio may be placed in stocks, up to five percent in real estate, and up to five percent in gold.

Funds in SOFAZ’s investment portfolio can be invested in securities that are denominated in the currencies of G7 countries (U.S., Germany, Great Britain, France, Italy, Canada and Japan), European Monetary Union member countries, Russia and Turkey, as well as the countries with long-term credit ratings of no less than “A” (Standard & Poors, Fitch) or “A2” (Moody’s).