Azerbaijan Oil Fund’s Annual Report: Spending is more than income

Azerbaijan Oil Fund’s Annual Report: Spending is more than income

Annual report is available at the CESD’s web site

Azerbaijan’s sovereign wealth fund SOFAZ recorded decrease in the revenues from the hydrocarbon sales in 2016 due to the low oil prices, while there was a significant increase in the revenues from the management of the Fund’s assets.
The revenues obtained from the sales of Azerbaijan’s share of hydrocarbons, the fees paid to the country for the transit of oil and gas through its territory, bonus payments, acreage fees and revenues from the management of SOFAZ assets recorded a total of 9.4 billion manats, or $5.8 billion, reads the annual report published on the website of SOFAZ.

The amount of SOFAZ’s revenue generated from the sales of profit oil and gas in 2016 equaled to 8.3 billion manats, or $5.189 billion. In accordance with the Production Sharing Agreements that regulate oil production both onshore and offshore, 98.3 percent of these revenues came from the sale of oil and gas extracted from the Azeri-Chirag-Guneshli and Shahdeniz fields, according to the report. Around $5.1 billion was attributed to Azeri-Chirag-Guneshli while $63.98 million fell for the sales of the profit gas from Shahdeniz, the report said. The remaining $24.9 million was earned from the sales of oil extracted from the other oilfields.
Other revenues were received from bonuses paid by investors for signing and fulfilling oil and gas contracts, transit fees and acreage fees.

SOFAZ’s expenditures in 2016 were equal to 9 billion manats ($5.4 billion). The biggest share of the total expenditures (84.4 percent) accrued to the annual transfer to the state budget, followed by expenditures on the SOFAZ funded state projects (15.4 percent) and SOFAZ’s administrative expenses at (0.2 percent).

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