State Oil Fund of Azerbaijan explained

The State Oil Fund of the Republic of Azerbaijan
Native Name:Azərbaycan Respublikasının Dövlət Neft Fondu
Abbreviation:SOFAZ
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Founding Location:Baku, Azerbaijan
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Type:SWF
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Area Served:or
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Owners:-->
Leader Title:Executive Director
Leader Name:Israfil Mammadov
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Parent Organisation:-->
Awards:United Nations Public Service Awards
EITI Award
Website:www.oilfund.az
Former Name:-->

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] Statue 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. Critics have described projects funded by SOFAZ as useless, and noted that contracts have been awarded to companies owned by the ruling Aliyev family in Azerbaijan. Funds from SOFAZ are frequently transferred to make up for state deficits.

In the first quarter of 2024 SOFAZ announced US$ 1,796 billion in income just from the Azeri-Chirag-Gunashl oil field complex alone.[10] SOFAZ owns 25% of the shares amongst BP, ExxonMobil, Amoco, Unocal, Statoil, McDermott and others.

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.[11] As of 2018, the executive director reports to the President. There have been three executive directors since 2001:

Supervisory Board

The President of Azerbaijan appoints the members of a Supervisory Board, who are de facto powerless. 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.[17]

Others

In June 2024, SOFAZ announced to invest US$ 100 million into Dubai-based GEMS Education.[18] [19]

Awards

Source

Notes and References

  1. Web site: IFC and Azerbaijan Support Private Sector Development in Emerging Markets . pressroom.ifc.org . October 28, 2021 .
  2. Web site: Columbia Center on sustainable investment . Natural Resource Funds Azerbaijan State Oil Fund of the Republic of Azerbaijan .
  3. News: Curran . Enda . 2013-02-13 . Azerbaijan to Buy Australian Real Estate . en-US . Wall Street Journal . 0099-9660.
  4. Di Bonaventura Altuve . Leonardo . 2023 . The demise of sovereign wealth funds . Review of International Political Economy . 31 . 277–303 . en . 10.1080/09692290.2023.2190601 . 257817535 . 0969-2290.
  5. Book: Altstadt, Audrey L. . Frustrated Democracy in Post-Soviet Azerbaijan . 2017 . Columbia University Press . 978-0-231-80141-6 . 24, 114–120 . en.
  6. Book: Waal, Thomas de . The Caucasus: An Introduction . 2018-11-02 . Oxford University Press . 978-0-19-068311-5 . 185 . en.
  7. Web site: State Oil Fund (Azerbaijan) . www.investopedia.com . October 28, 2021 .
  8. Web site: Azərbaycan Respublikasının Dövlət Neft Fondunun yaradılması haqqında AZƏRBAYCAN RESPUBLİKASI PREZİDENTİNİN FƏRMANI . December 29, 1999 . www.e-qanun.az . October 28, 2021 .
  9. Web site: Azərbaycan Respublikasının Dövlət Neft Fondu haqqında Əsasnamənin təsdiq edilməsi barədə AZƏRBAYCAN RESPUBLİKASI PREZİDENTİNİN FƏRMANI . December 29, 2000 . www.e-qanun.az . October 28, 2021 .
  10. Web site: 2024-05-07 . State Oil Fund's income soars to almost $1.8 billion from ACG this year . 2024-07-03 . Azernews.Az . en.
  11. Book: Gawrich . Andrea . Are Resources a Curse?: Rentierism and Energy Policy in Post-Soviet States . Franke . Anja . Windwehr . Jana . 2010 . Verlag Barbara Budrich . 978-3-86649-677-4 . 78 . en.
  12. Web site: S. R. Şərifovun Azərbaycan Respublikası Dövlət Neft Fondunun İcraçı Direktoru təyin edilməsi haqqında Azərbaycan Respublikası Prezidentinin Sərəncamı . January 3, 2001 . www.e-qanun.az . October 28, 2021 .
  13. Web site: S. R. Şərifovun Azərbaycan Respublikasının Dövlət Neft Fondunun İcraçı direktoru vəzifəsindən azad edilməsi haqqında Azərbaycan Respublikası Prezidentinin Sərəncamı . April 18, 2006 . www.e-qanun.az . October 28, 2021 .
  14. Web site: Ş.A.Mövsümovun Azərbaycan Respublikası Dövlət Neft Fondunun İcraçı Direktoru təyin edilməsi haqqında Azərbaycan Respublikası Prezidentinin Sərəncamı . May 15, 2006 . www.e-qanun.az . October 28, 2021 .
  15. Web site: Ş.A.Mövsümovun Azərbaycan Respublikası Dövlət Neft Fondunun İcraçı direktoru vəzifəsindən azad edilməsi haqqında Azərbaycan Respublikası Prezidentinin Sərəncamı . November 29, 2019 . www.e-qanun.az . October 28, 2021 .
  16. Web site: İ.A.Məmmədovun Azərbaycan Respublikası Dövlət Neft Fondunun İcraçı direktoru təyin edilməsi haqqında Azərbaycan Respublikası Prezidentinin Sərəncamı . November 29, 2019 . www.e-qanun.az . October 28, 2021 .
  17. Web site: December 9, 2019 . Azərbaycan Respublikası Dövlət Neft Fondu Müşahidə Şurasının yeni tərkibinin təsdiq edilməsi haqqında Azərbaycan Respublikası Prezidentinin Sərəncamı . August 23, 2023 . www.e-qanun.az .
  18. Web site: 2024-06-18 . Azerbaijan’s State Oil Fund to invest $100M in one of world’s largest private education providers . 2024-07-03 . Report News Agency . en.
  19. Web site: 2024-06-18 . SOFAZ invests in one of largest private companies providing educational services in world . 2024-07-03 . Azernews.Az . en.
  20. Web site: List of Winners and Finalists for the 2007 UN Public Service Awards . https://web.archive.org/web/20160305130820/http://unpan1.un.org/intradoc/groups/public/documents/un/unpan026198.pdf . March 5, 2016 . unpan1.un.org .
  21. Web site: February 24, 2009 . EITI Chairman's Awards presented in Doha . dead . https://web.archive.org/web/20211030030114/https://eiti.org/es/node/3912 . October 30, 2021 . October 28, 2021 . eiti.org . EITI.

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