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Azerbaijan’s Oil Fund plans to have $176 bn in assets by 2025

Published: May 7, 2012 | 8:12 am
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The State Oil Fund of Azerbaijan (SOFAZ) expects a 5.4-fold increase in its assets by 2025.

SOFAZ executive director Shahmar Movsumov has stated in an interview for newspaper Respublika, the official organ of the Cabinet Ministers of Azerbaijan, with keeping world prices at a level no lower than $80 per barrel and ensuring return on asset of Fund’s assets placement at a level of 4% per annum, SOFAZ overall assets amount to $176 bn by the end of 2024.

Currently only world oil prices exceed the forecasted level (in the 1st quarter Azerbaijan exported oil at $118 per barrel), and return on assets was more than 4-fold lower than the forecast.

“In 2005-9 yield of SOFAZ assets placement was 3.69%, and in 2010-11 it dropped to 0.91%. As a result, after changing the investment strategy, in 2012 the Fund was allowed to invest up to 15% of its assets in equities, gold and real estate. Currently SOFAZ started investing in physical gold, and during this year it will start investing in real estate,” Movsumov said.

By 1 April SOFAZ assets reached $32.4 billion or 75% of Azerbaijan’s strategic currency reserves, equal to $43.2 billion. Since the end of 1999, when the Fund was established, its revenues totaled $70.8 billion, from which only 45.7% were kept. In 2003-12 the SOFAZ transferred AZN 27 billion to the State Budget of Azerbaijan. At that, in 2012 its transfer will make up 60.3% of the Azerbaijani State Budget revenues.


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