State Oil Fund of Azerbaijan Republic (SOFAZ) assets have been increased from $ 2,017 million in August, 2007 to $ 3,335 million in April, 01, 2008. Budget revenues of the State Oil Fund of the Republic of Azerbaijan (SOFAZ) for the period of January-March, 2008 reached 1116,4 million manat, while budget expenditures constituted 438,4 mln. Manat. Revenues of the 2008 budget of the fund was approved 3,60, expenditures 1,68 billion manat, the amounts, however, will be expected to be amended in May, 2008 when the state budget is amended at the Parliament. SOFAZ’s revenues have been increased thanks to the oil price in the market.

There are, still, however, some concerns on how oil revenues are effectively and transparent used. If the share of USD in the SOFAZ’s assests was 55 per cent last year, the share increased to the 63,03 per cent in 2008 in spite of the fact the dollar falls against euro and other major world currencies. Securities are priority in SOFAZ’s portfolio investment , $ 2.495 million or 75,49 per cent of all assets has been directed to securities. Only $ 2,81 million was spent to shares which is less than 0,1 per cent although purchasing shares are getting more profitable. In spite of the mortgage crises, $ 3,65 million more that amount paid to shares was spent to hold mortgage securities.

SOFAZ deposed 25 million Euro to Society Generale Bank (France) for 2 weeks in 2007. There are no explanation from SOFAZ side reasons of short deposit for Society Generale Bank whose net incomes dropped from 5,2 billion Euro in 2006 to 0,9 billion Euro in 2007.

Researchers and monitoring confirm that although Fund’s official declared that Norway model is applied in Azerbaijan, very few elements of this model is used in fact. There is no professional evaluation while partner banks are selected as well as transparency is still one of the major problems.

STRATEGY FOR STATE OIL FUND OF AZERBAIJAN REPUBLIC

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Last correction date of the file: 24/7/2008 - 15:22:14