TODAY.AZ / Business

SOFAZ's revenues from oil, gas fields hit $3.8 bn in 2020

25 January 2021 [15:52] - TODAY.AZ

By Azernews

By Ayya Lmahamad

Revenues of Azerbaijan's State Oil Fund from the country’s major oil and gas fields amounted to $3.8 billion in 2020, the Fund has reported.

Azeri-Chirag-Guneshli block of fields, which are the largest oil field in the Azerbaijani sector of the Caspian Sea, accounted for $3.5 billion of this revenue.

Moreover, the fund’s revenues from the Shah Deniz field, which is among the world’s largest gas-condensate fields, amounted to $293.9 million in 2020. In addition, revenues from the sale of condensate from Shah Deniz amounted to $223.4 million.

Furthermore, the Fund’s budget revenues amounted to AZN 9.3 billion, while budget expenditures hit AZN 12.4 billion in 2020.

The Fund’s revenues from oil and gas agreements totaled AZN 7.3 billion, including premium payments of AZN 767.8 million, transit revenues of AZN 20.4 million and payments for an area of AZN 6.7 million.

Likewise, revenues from the management of the Fund’s assets amounted to AZN 1.9 billion. In addition, extra-budgetary revenues amounted to AZN 3.4 billion.

Some AZN 12.2 billion were transferred to the state budget within the framework of the implementation of the Fund’s budget for 2020.

Additionally, AZN 200 million was allocated for the resettlement of refugees and IDPs and improvement of their social and living conditions.

In the meantime, AZN 4.1 million was allocated for financing the “State Program on Improvement of International Competitiveness of Higher Education System in Azerbaijan for 2019-2021”.

During 2020, SOFAZ management expenditures amounted to AZN 21.2 million.

As of January 1, 2021, the Fund’s assets totaled $43.5 billion, increasing by 0.56 percent from the beginning of 2020.

SOFAZ was established in December 1999 by the Presidential Decree and is a sovereign wealth fund of Azerbaijan, which accumulates and preserves the nation's oil and gas revenues for future generations. The fundamental mission of SOFAZ is to ensure intergenerational equality with regard to the country's oil wealth and to accumulate and safeguard the oil revenues for generations to come.

The Fund accumulates income from the sale of oil contracts, and in 2003 it started to make transfers to the state budget of Azerbaijan. As for now, SOFAZ contribution to the country’s GDP is over 80 percent.

The contract for the development of Azeri-Chirag-Guneshli (ACG) oil fields was signed on September 20, 1994, and entered into force in December. The contract for the development of ACG block was extended to 2050 in September 2017.

The shareholders in the Azeri-Chirag-Guneshli project are BP (operator, 30.37 percent), SOCAR (25 percent), American Chevron (9.57 percent), ExxonMobil (6.79 percent), Indian ONGC (2.31 percent), Japanese Inpex Corp. (9.31 percent), ITOCHU Oil (3.65 percent), Norwegian Statoil (7.27 percent) and Turkish TPAO (5.73 percent).

The contract on development of Shah Deniz gas field was signed in 1996. Shareholders of Shah Deniz project are: BP (operator, 28.8 percent), TPAO (19 percent), SOCAR (16.7 percent), Petronas (15.5 percent), LUKOIL (10 percent) and NICO (10 percent).


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