Baku, Azerbaijan, Aug. 27
By Ilkin Shafiyev – Trend:
In 2017, proceeds to the SOFAZ’s budget from the sale of Azerbaijan’s profit oil and gas constituted $6,409.6 million, reads SOFAZ’s 2017 Annual Report.
In 2017, SOFAZ’s revenues obtained from the sales of Azerbaijan’s share of hydrocarbons rose by 23.51 percent compared to 2016 in virtue of increase in the average annual price of crude oil from $41.9 in 2016 to $52.9, according to the report.
In accordance with the Production Sharing Agreements (PSA) that regulate oil production both onshore and offshore, 97.4 percent of the revenues generated from the sales of profit oil and gas in 2017 came from the sale of oil and gas extracted from the Azeri-Chirag-Gunashli (ACG) field.
Hence, in the reference year, a profit of $6,241.2 million and $135.6 million were received from ACG and Shah Deniz (gas condensate sales) fields, respectively, and the remaining $32.8 million was earned from the sales of oil extracted from other oil fields.
In 2017, another revenue inflow was generated from the transportation of oil and gas through the territory of Azerbaijan (transit fees). The amount of transit fees transferred to the Fund’s budget constituted $10.5 million.
In 2017, a sum of $2.1 million of acreage fees was transferred to SOFAZ in accordance with the offshore exploration and production sharing agreement between SOCAR and the oil company co-owned by SOCAR and BP Exploration Limited (Azerbaijan) over the Shafag-Asiman field in the Azerbaijani sector of the Caspian Sea.
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 include: accumulation of resources and placement of the fund's assets abroad in order to minimize the negative effect on the economy, the prevention of "Dutch disease" to some extent, promotion of resource accumulation for future generations and support of current social and economic processes in Azerbaijan.
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