State Oil Fund of Azerbaijan

The State Oil Fund of the Republic of Azerbaijan

Azərbaycan Respublikasının Dövlət Neft Fondu
Abbreviation	SOFAZ
Established	December 29, 1999; 25 years ago (1999-12-29)
Founded at	Baku, Azerbaijan
Type	SWF
Executive Director	Israfil Mammadov
Award(s)	United Nations Public Service Awards EITI Award
Website	www.oilfund.az

The State Oil Fund of the Republic of Azerbaijan (Azerbaijani: Azərbaycan Respublikasının Dövlət Neft Fondu), also known by its abbreviation SOFAZ, is a sovereign wealth fund of Azerbaijan founded in December 1999.^[1][2]

Nearly all the fund's revenues come from Azerbaijan's oil and gas exports.^[3][4] The fund has been criticized for its lack of transparency and for enriching Azerbaijan's political elites.^[5][6]

History and organization

The State Oil Fund of the Republic of Azerbaijan (SOFAZ) was established by Heydar Aliyev's Decree No. 240 dated December 29, 1999.^[7][8] Statute of the State Oil Fund was approved by the Decree of the President of the Republic of Azerbaijan No. 434 dated December 29, 2000.^[9]

SOFAZ has been criticized for lacking transparency in its finances and in its contracting, which has raised questions about corruption.^[5] Critics have described projects funded by SOFAZ as useless,^[6] and noted that contracts have been awarded to companies owned by the ruling Aliyev family in Azerbaijan.^[5] Funds from SOFAZ are frequently transferred to make up for state deficits.^[5]

In 2024, the revenue generated by SOFAZ from the sale of oil from the Azeri-Chirag-Gunashli (ACG) field was US$ 5,725 billion.^[10][11][12] SOFAZ owns 25% of the shares amongst BP, ExxonMobil, Amoco, Unocal, Statoil, McDermott and others.^[12]

Executive Director

The operational management of the Fund's activities is carried out by the Executive Director, who is appointed and dismissed by the President.^[13] As of 2018, the executive director reports to the President.^[14] There have been three executive directors since 2001:

• Samir Sharifov (January 3, 2001^[15] – April 18, 2006^[16])
• Shahmar Movsumov (May 15, 2006^[17] – November 29, 2019^[18])
• Israfil Mammadov (November 29, 2019^[19] – present)

Supervisory Board

The President of Azerbaijan appoints the members of a Supervisory Board, who are de facto powerless.^[13] The board comprises 7 key officials including the Prime Minister, Deputy Speaker of the National Assembly, Assistants to the President of Azerbaijan – Head of Economic Affairs and Innovative Development Policy, and Head of Economic Policy and Industrial Affairs departments of the Presidential Administration, Minister of Finance, Minister of Economy, and the Chairman of the Central Bank of Azerbaijan.^[20]

Others

In June 2024, SOFAZ announced a plan to invest US$100 million in Dubai-based GEMS Education.^[21][22]

Awards

• United Nations Public Service Awards (2007)^[23]
• EITI Award (2009)^[24]

References

1. "IFC and Azerbaijan Support Private Sector Development in Emerging Markets". pressroom.ifc.org. Retrieved October 28, 2021.
2. Columbia Center on sustainable investment. "Natural Resource Funds Azerbaijan State Oil Fund of the Republic of Azerbaijan" (PDF).
3. Curran, Enda (2013-02-13). "Azerbaijan to Buy Australian Real Estate". Wall Street Journal. ISSN 0099-9660.
4. Di Bonaventura Altuve, Leonardo (2023). "The demise of sovereign wealth funds". Review of International Political Economy. 31: 277–303. doi:10.1080/09692290.2023.2190601. ISSN 0969-2290. S2CID 257817535.
5. Altstadt, Audrey L. (2017). Frustrated Democracy in Post-Soviet Azerbaijan. Columbia University Press. pp. 24, 114–120. ISBN 978-0-231-80141-6.
6. Waal, Thomas de (2018-11-02). The Caucasus: An Introduction. Oxford University Press. p. 185. ISBN 978-0-19-068311-5.
7. "State Oil Fund (Azerbaijan)". www.investopedia.com. Retrieved October 28, 2021.
8. "Azərbaycan Respublikasının Dövlət Neft Fondunun yaradılması haqqında AZƏRBAYCAN RESPUBLİKASI PREZİDENTİNİN FƏRMANI". www.e-qanun.az. December 29, 1999. Retrieved October 28, 2021.
9. "Azərbaycan Respublikasının Dövlət Neft Fondu haqqında Əsasnamənin təsdiq edilməsi barədə AZƏRBAYCAN RESPUBLİKASI PREZİDENTİNİN FƏRMANI". www.e-qanun.az. December 29, 2000. Retrieved October 28, 2021.
10. "Azerbaijan unveils revenues from Azeri-Chirag-Gunashli, Shah Deniz fields | Caliber.Az". caliber.az. 2024-12-09. Retrieved 2024-12-09.
11. "SOFAZ reveals its revenues from ACG". Apa.az. Retrieved 2024-12-09.
12. "State Oil Fund's income soars to almost $1.8 billion from ACG this year". Azernews.Az. 2024-05-07. Retrieved 2024-07-03.
13. Gawrich, Andrea; Franke, Anja; Windwehr, Jana (2010). Are Resources a Curse?: Rentierism and Energy Policy in Post-Soviet States. Verlag Barbara Budrich. p. 78. ISBN 978-3-86649-677-4.
14. Altstadt, Audrey (2018), Frustrated Democracy in Post-Soviet Azerbaijan, Columbia University Press, pp. 114–, doi:10.7312/alts70456, ISBN 978-0-231-80141-6
15. "S. R. Şərifovun Azərbaycan Respublikası Dövlət Neft Fondunun İcraçı Direktoru təyin edilməsi haqqında Azərbaycan Respublikası Prezidentinin Sərəncamı". www.e-qanun.az. January 3, 2001. Retrieved October 28, 2021.
16. "S. R. Şərifovun Azərbaycan Respublikasının Dövlət Neft Fondunun İcraçı direktoru vəzifəsindən azad edilməsi haqqında Azərbaycan Respublikası Prezidentinin Sərəncamı". www.e-qanun.az. April 18, 2006. Retrieved October 28, 2021.
17. "Ş.A.Mövsümovun Azərbaycan Respublikası Dövlət Neft Fondunun İcraçı Direktoru təyin edilməsi haqqında Azərbaycan Respublikası Prezidentinin Sərəncamı". www.e-qanun.az. May 15, 2006. Retrieved October 28, 2021.
18. "Ş.A.Mövsümovun Azərbaycan Respublikası Dövlət Neft Fondunun İcraçı direktoru vəzifəsindən azad edilməsi haqqında Azərbaycan Respublikası Prezidentinin Sərəncamı". www.e-qanun.az. November 29, 2019. Retrieved October 28, 2021.
19. "İ.A.Məmmədovun Azərbaycan Respublikası Dövlət Neft Fondunun İcraçı direktoru təyin edilməsi haqqında Azərbaycan Respublikası Prezidentinin Sərəncamı". www.e-qanun.az. November 29, 2019. Retrieved October 28, 2021.
20. "Azərbaycan Respublikası Dövlət Neft Fondu Müşahidə Şurasının yeni tərkibinin təsdiq edilməsi haqqında Azərbaycan Respublikası Prezidentinin Sərəncamı". www.e-qanun.az. December 9, 2019. Retrieved August 23, 2023.
21. "Azerbaijan's State Oil Fund to invest $100M in one of world's largest private education providers". Report News Agency. 2024-06-18. Retrieved 2024-07-03.
22. "SOFAZ invests in one of largest private companies providing educational services in world". Azernews.Az. 2024-06-18. Retrieved 2024-07-03.
23. "List of Winners and Finalists for the 2007 UN Public Service Awards" (PDF). unpan1.un.org. Archived from the original (PDF) on March 5, 2016.
24. "EITI Chairman's Awards presented in Doha". eiti.org. EITI. February 24, 2009. Archived from the original on October 30, 2021. Retrieved October 28, 2021.

Source

• Aslanli, Kenan (2015). "Fiscal sustainability and the State Oil Fund in Azerbaijan". Journal of Eurasian Studies. 6 (2): 114–121. doi:10.1016/j.euras.2015.03.004. ISSN 1879-3665.