(MENAFN- AzerNews)
By Leman Mammadova
The total income of the State Oil Fund of Azerbaijan (SOFAZ) reached 17.614 billion manats ($10.3 billion).
This exceeded the forecast amount ($9 billion) by 15 percent, according to the report of the Chamber of Accounts following the execution of SOFAZ's 2018 budget.
SOFAZ's expenses for 2018 reached more than 11.46 billion manats ($6.74 billion), which is less than the forecast amount ($6.75 billion) by 0.2 percent. As a result, by the end of the year, the budget had a surplus of more than 6.158 billion manats ($3.62 billion) and funds in the amount of more than $3.6 billion were transferred for accumulation
SOFAZ's revenues increased due to the growth of oil prices and production at the Azeri-Chirag-Gunashli fields. The company's revenues were formed by the sale of hydrocarbons, acre, transit and bonus payments, as well as asset management. Virtually all income (94.5 percent) was formed through revenues from the sale of oil and gas. Some 4.3 percent accounts for bonuses, while 1.02 percent for asset management.
The extra-budgetary expenditures amounted to about 1.59 billion manats ($0.94 billion) as a result of fluctuations in the exchange rate of the currencies included in SOFAZ's investment portfolio. As a result of fluctuations in gold prices, the extra-budgetary revenues reached 32.5 million manats ($19.12 million). Consequently, extra-budgetary expenditure reached $913.7 million (1.55 billion manats).
Most of the assets of the investment portfolio of SOFAZ for 2018 were debt obligations and currency - more than $29.455 billion (76.48 percent), which is 0.19 percent higher than last year.
In the structure of the Fund's assets, shares accounted for 12.84 percent or more than $4.9 billion (2 percent lower than last year). The share of real estate in the investment portfolio is 5.25 percent or more than $2 billion.
The share of real estate in the portfolio has not changed significantly, while the share of gold in the structure of assets increased by almost 2 percent compared to the same period of last year or a little more than $2,093 billion in monetary terms, which is 5.43 percent of the investment portfolio.
In general, over 20.7 tons of gold was acquired in 2018. As a result, the total amount of gold in the investment portfolio of the Fund was slightly more than 50.95 tons.
The average annual profitability of the investment portfolio amounted to 0.35 percent; for debt obligations and currency it was 0.68 percent, for real estate - 0.54 percent. Shares accounted for negative returns -0.87 percent. In general, the highest return in the investment portfolio of the Fund was in real estate - 9.9 percent.
The State Oil Fund of Azerbaijan established in 1999 with the assets of $271 million is aimed at efficient accumulation of resources and placement of assets abroad, as well as for the preservation and multiplication of funds received from the effective management of oil revenues in order to minimize the negative effect to the economy, prevention of "Dutch disease" to some extent, promotion of resource accumulation for future generations and support of current social and economic processes in Azerbaijan.
Based on SOFAZ's regulations, its funds may be used for the construction and reconstruction of strategically important infrastructure facilities, as well as solving important national problems.
The revenues of the State Oil Fund are formed primarily from revenues from the sale of oil, which remains at the disposal of Azerbaijan in accordance with production-sharing agreements.
Budget revenues of SOFAZ reached 17.6 billion manats ($10.36 billion) in 2018, which is a 31.1 percent increase compared to 2017.
Revenue of 17.3 billion manats ($10.18 billion) was received from implementation of oil and gas agreements, including 16.6 billion manats ($9.77 billion) from the sale of profit oil and gas, 765.2 million manats ($450.25 million) as bonus payments, 4.1 million manats ($2.41 million) as acreage fee and 18.1 million manats ($10.65 million) as transit payments.
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