SOFAZ increases revenues from ACG, Shah Deniz projects

By: Aynur Jafarova

Azerbaijan’s state oil fund SOFAZ has earned $109.596 billion from 2001 to December 1, 2014 by developing the giant Azeri-Chirag-Gunashli (ACG) block of oil and gas fields in the Azerbaijani sector of the Caspian Sea.

“The fund gained $14.564 billion from January to December 1, 2014 within the framework of ACG project,” SOFAZ told Trend Agency last week.

The ACG fields have been active since 1997. Its production first started at the Chirag part of the block. It was followed by Azeri Project; Central Azeri in February 2005, West Azeri in December 2005, and East Azeri in October 2006.

The Deepwater Gunashli section launched production in April 2008.

SOFAZ also said it gained $2.088 billion of profit from 2007 to December 1, 2014 by implementing the development project of the giant Shah Deniz gas condensate field in the Caspian Sea.

SOFAZ earned some $491 million as part of the Shah Deniz project from January 1, 2014 to December 1, 2014.

The Shah Deniz field, one of the world’s largest gas-condensate fields, was discovered in 1999. Its gas reserves are estimated at 1.2 trillion cubic meters. Overall, the field has proved to be a secure and reliable supplier of gas to Azerbaijan, Georgia, Turkey, and Europe.

SOFAZ, an entity that accumulates and manages Azerbaijan’s oil and gas revenues, was established in 1999 with an asset worth $271 million.

The main goals of the fund include accumulation of revenues, investment of assets abroad to minimize negative impacts on economy, prevention of the ‘Dutch disease’, ensuring savings for future generations, and maintaining the current social and economic standards in the country.

The asset of SOFAZ increased by 4.86 percent as of July 1, 2014 compared to early 2014 reaching to over $37.622 billion.

Since the first quarter of 2012, the fund started purchasing gold. The amount of the purchased gold reached to 30 tons 175 kg (970,146 ounces) as of April 1.