SOFAZ announces revenues from largest oil and gas projects

By Azernews

By Narmina Mammadova

From early 2001 and until November 1, 2018, the State Oil Fund of Azerbaijan (SOFAZ) received $137.446 billion as part of the project to develop the Azeri-Chirag-Gunashli (ACG) block of oil and gas fields in the Azerbaijani sector of the Caspian Sea, SOFAZ told Trend on December 6.

“In January-October 2018, SOFAZ received $8.96 billion within the ACG project,” the source said.

Revenues from the sale of gas condensate produced at the Shah Deniz field in January-October 2018, amounted to $ 222 million. In total, since 2007, SOFAZ revenues from gas sales from this field amounted to $ 506 million.

The contract for developing the ACG field was signed in 1994 for thirty years and already after three years in 1997 the first oil was extracted from the Chirag platform and produced. Thirteen companies from eight countries (Azerbaijan, the U.S., Great Britain, Russia, Turkey, Norway, Japan, Saudi Arabia) have participated in signing of the "Contract of the Century".

A new agreement on the development of the ACG block until 2050 was signed in Baku on September 14, 2017.

The new ACG participating interests are as follows: BP - 30.37 percent; AzACG (SOCAR) - 25 percent; Chevron - 9.57 percent; INPEX - 9.31 percent; Statoil - 7.27 percent; ExxonMobil - 6.79 percent; TP - 5.73 percent; ITOCHU - 3.65 percent; ONGC Videsh Limited (OVL) - 2.31 percent.

SOFAZ was established in 1999 with assets of $271 million. As of the first half of 2018 SOFAZ’s assets increased by 6.22 percent as compared to early 2018 ($35.806 billion) and amounted to $38.036 billion.

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 main goals of the State Oil Fund include accumulation of resources and placement of assets abroad 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.