State Oil Fund's revenues hit $9.4bn in 2021

By Azernews

By Ayya Lmahamad

The Azerbaijani State Oil Fund (SOFAZ) has said that its revenues and budget expenditures respectively totaled AZN 15.9 billion ($9.4 billion) and AZN 11.3 billion ($6.6 billion) in 2021.

SOFAZ revenues from oil and gas agreement implementation totaled AZN 12.6 billion ($7.4 billion), including AZN 11.8 billion ($6.9 billion) from the sale of profit oil and gas during the reported period.

Furthermore, bonus payments accounted for AZN 776.9 million ($456.9m), transit payments accounted for AZN 21.4 million ($12.5m), and acreage fees accounted for AZN 5.3 million ($3.1m) of revenue.

SOFAZ's assets surpassed $45 billion by the end of 2021. Meanwhile, revenue from investment activities has totaled $10.2 billion since the fund's inception, with $8.9 billion occurring in the past ten years.

For the reported period, the fund's asset management revenues totaled AZN 3.2 billion ($1.9 billion), accounting for 20.56 percent of total revenues.

The fund's extra-budgetary expenditures on foreign exchange movements totaled AZN 2.1 billion ($1.2 billion).

Some AZN 11.3 billion ($6.6 billion) were transferred to the state budget during the execution of the SOFAZ budget for 2021. Furthermore, AZN 10.2 million ($5.9 million) was allocated last year to the "State Program on Raising Competitiveness of Higher Education in Azerbaijan in 2019-2023".

During the reported period, SOFAZ's administrative and operational expenses totaled AZN 22.5 million ($13.2 million).

As of January 1, 2022, the value of SOFAZ assets under management was $45 billion, up 3.35 percent from the start of the year ($43.5 billion).

"SOFAZ's budget revenue and asset management accounted for the majority of the increase. During the current period, each asset class contributed positively to the overall investment portfolio return, with equity investments accounting for the majority of the returns," the fund reported.

SOFAZ is a sovereign wealth fund founded in 1999 to collect and preserve Azerbaijan's oil and gas revenues for future generations. It earns money from the sale of oil contracts and began transferring funds to Azerbaijan's state budget in 2003. As of now, the fund contributes more than 80 percent of the country's GDP.