SOFAZ as­sets reach $33.2B

Azer News - - Front Page - By Gu­nay Ca­mal

The as­sets of Azer­bai­jan’s state oil fund SOFAZ, which is in charge of ac­cu­mu­lat­ing and man­ag­ing the coun­try's oil and gas rev­enues, jumped by 0.18 per­cent.

SOFAZ Ex­ec­u­tive Di­rec­tor Shah­mar Mov­sumov an­nounced about this at a press con­fer­ence in Baku on April 18, not­ing that the fig­ure hit $33.207 bil­lion as of April 1.

“The in­crease was mainly due to a size­able pos­i­tive ef­fect of changes in the ex­change rates of in­vest­ment port­fo­lio cur­ren­cies (mainly Euro, Rus­sian ru­ble and Bri­tish pound), as well as the im­pact of as­set ap­pre­ci­a­tion (specif­i­cally, eq­uity and gold port­fo­lios),” said Mov­sumov.

Bud­get rev­enues of SOFAZ reached 3.273 bil­lion man­ats, while bud­get ex­pen­di­tures con­sti­tuted 3.848 bil­lion man­ats in Jan­uary-March 2017. SOFAZ’s rev­enues of 2,899.1 mil­lion man­ats were re­ceived from im­ple­men­ta­tion of oil and gas agreements, in­clud­ing 2.894 bil­lion man­ats from the sale of profit oil and gas, 0.1 mil­lion man­ats as bonus pay­ments and 4.6 mil­lion man­ats as tran­sit pay­ments.

The rev­enues from man­ag­ing as­sets of the Fund amounted to 373.4 mil­lion man­ats, while the ex­tra-bud­getary ex­pen­di­tures re­lated to the reval­u­a­tion of for­eign ex­change to­taled 873.9 mil­lion man­ats in Jan­uary-March 2017.

Be­ing a spe­cial pur­pose state or­ga­ni­za­tion, the pri­mary ob­jec­tives of SOFAZ are to help main­tain macroe­co­nomic sta­bil­ity in the coun­try and to gen­er­ate wealth for present and fu­ture gen­er­a­tions.

Mov­sumov went on to say that SOFAZ will con­tinue to in­vest in real es­tate within its in­vest­ment strat­egy on real es­tate. The share of SOFAZ in­vest­ments that can be made in real es­tate is 10 per­cent of the to­tal in­vest­ment port­fo­lio.

The prac­tice of in­vest­ing in real es­tate abroad has al­ready al­lowed the Fund to ac­quire Gallery Ac­tor, a mixed-use of­fice and re­tail com­plex lo­cated on Pushkin Square in Moscow for $133 mil­lion, an of­fice com­plex in Lon­don's West End for £177.35 mil­lion, a prop­erty in Paris for €135 mil­lion, Pine Av­enue Tower worth $447 mil­lion in Seoul and Palazzo Tu­rati of­fice build­ing in Italy, Mi­lan.

Mov­sumov fur­ther men­tioned that the Fund ex­tended the term of the de­posit in the In­ter­na­tional Bank of Azer­bai­jan (IBA) for an­other year.

"We have two de­posits in the IBA, the first of which ex­pired in March, and we ex­tended it for an­other year, the sec­ond ex­pires in May this year, I think that its term will also be ex­tended,” he said, adding that new de­posits are not planned.

The amount of each de­posit is $ 500 mil­lion.

Speak­ing about the trans­fers to the Cen­tral Bank of Azer­bai­jan (CBA) to en­sure macroe­co­nomic sta­bil­ity in 2017, Mov­sumov said that the fig­ure may be less than 7.5 bil­lion man­ats.

“The SOFAZ bud­get for 2017 stip­u­lates al­lo­ca­tion of 7.5 bil­lion man­ats for these pur­poses, and in the first quar­ter we trans­ferred 2.279 bil­lion man­ats to the Cen­tral Bank. How­ever, the eco­nomic sit­u­a­tion is such that, I think, that this ex­pen­di­ture will not be ex­e­cuted com­pletely,” Mov­sumov said.

SOFAZ ear­lier re­ported that these funds [7.5 bil­lion man­ats] were planned to be di­rected to im­ple­men­ta­tion of the ac­tiv­i­ties stip­u­lated in the mone­tary pro­gram of the Fi­nan­cial Sta­bil­ity Board for 2017, as well as to re­al­iza­tion of mea­sures to en­sure macroe­co­nomic and fi­nan­cial sta­bil­ity in the cur­rent year and in the medium term. Part of these funds will also be di­rected to mea­sures to ac­cel­er­ate the process of re­cov­ery of the IBA. SGC

Shah­mar Mov­sumov also ex­cluded any prob­lems with the fi­nanc­ing of the projects of the South­ern Gas Cor­ri­dor.

He said that the Fund did not is­sue any funds for the SGC in the first quar­ter of 2017.

“How­ever, the 2017 bud­get stip­u­lates al­lo­ca­tion of funds to the SGC project re­al­iza­tion. I can say with con­fi­dence that SOFAZ has funds to fi­nance the project, so no prob­lem will arise with fund­ing this year. Be­sides, negotiations are un­der­way for the fi­nanc­ing of the South­ern Gas Cor­ri­dor in next two years. "

The South­ern Gas Cor­ri­dor is one of the pri­or­ity en­ergy projects for the EU. It en­vis­ages the trans­porta­tion of gas from the Caspian re­gion to the Euro­pean coun­tries through Ge­or­gia and Turkey.

As part of the Stage 2 of the Shah Deniz de­vel­op­ment, the gas will be ex­ported to Turkey and Euro­pean mar­kets by ex­pand­ing the South Cau­ca­sus Pipeline and the con­struc­tion of Trans Ana­to­lian Nat­u­ral Gas Pipeline and Trans Adri­atic Pipeline.

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