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SOFAZ revenues to exceed forecast more than twice

Oil&Gas Materials 28 December 2016 08:08
Total revenues of the State Oil Fund of Azerbaijan (SOFAZ) are expected to be $5.8 billion in 2016 instead of the forecast $2.8 billion
SOFAZ revenues to exceed forecast more than twice

Baku, Azerbaijan, Dec. 26

By Maksim Tsurkov – Trend:

Total revenues of the State Oil Fund of Azerbaijan (SOFAZ) are expected to be $5.8 billion in 2016 instead of the forecast $2.8 billion, SOFAZ Executive Director Shahmar Movsumov said in an exclusive interview with Trend.

Movsumov noted that SOFAZ’s budget and the state budget for 2016 were prepared on the basis of oil price of $25 per barrel.

Therefore, considering this oil price, the revenue part of SOFAZ’s budget was forecast at $2.8 billion, explained the executive director.

"Meanwhile, the average price for a barrel of oil was $41.7 during 2016, as a result of which the Fund’s total revenues are expected at $5.8 billion," he added.

Movsumov also said that depending on the rate differences which may arise as a result of changes in exchange rates of currencies included in the investment portfolio, the Fund’s USD assets may increase or decrease at the end of 2016 in line with the volume of the rate difference.

SOFAZ was established in 1999 with assets of $271 million.

Based on SOFAZ’s regulations, its funds may be used for construction and reconstruction of strategically important infrastructure facilities, as well as solving important national problems.

The main goals of the State Oil Fund are accumulation of resources and placement of the Fund’s assets abroad in order to minimize the negative effect on the economy, prevention of "Dutch disease", promotion of resource accumulation for future generations, and supporting current social and economic processes in Azerbaijan.

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Follow the author on Twitter: @MaksimTsurkov

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