oil fund

STATE OIL FUND OF THE REPUBLIC OF AZERBAIJAN

Mission, goal, philosophy

Mission, goal, philosophy

Mission:

The mission the State Oil Fund of the Republic of Azerbaijan (SOFAZ) is to transform depletable hydrocarbon reserves into financial assets generating perpetual income for current and future generations.

oil fund

Goals and philosophy:

A number of agreements on joint development of oil and gas resources were signed with foreign investors in the frame of Oil Strategy, created by the national leader Heydar Aliyev. The issue on effective management of revenues from implementation of these agreements was brought to agenda. For this purpose, SOFAZ was established in accordance with the Decree of the President of the Republic of Azerbaijan dated December 29, 1999.

The cornerstone of the philosophy behind SOFAZ is to ensure intergenerational equality with regard to the country's oil wealth. The main goal of establishment of SOFAZ is to accumulate and efficiently manage oil revenues.

SOFAZ's activity is directed to the achievement of the following objectivies:

Preservation of macroeconomic stability, ensuring fiscal-tax discipline, decreasing dependence on oil revenues and stimulating development of the non-oil sector

Considering that oil and gas are depletable resources ensuring inter-generational equality with regard to the country's oil wealth and accumulate and preserve oil revenues for future generations

Financing major national scale projects to support socio - economic progress

SOFAZ is an extra-budgetary, legal and state entity with its own accounts in banks and owns a seal with the emblem of the Republic of Azerbaijan and its name, stamp and letterhead. Relation between the SOFAZ’s revenues and expenditures, and state budget is built only within bounds of summary revenues and expenditures of public administration sector and pursues a goal of following a single macroeconomic policy. The assets of SOFAZ could not be used for lending to state authorities, state and non-state organizations and as guarantee for the liabilities of any subject. In accordance with the Constitutional Law of the Republic of Azerbaijan on “Law on Normative Legal Acts” SOFAZ could not create legal regulation acts.