By the decree of Azerbaijani President Ilham Aliyev issued on December 19, 2013, the budget of SOFAZ for fiscal year 2014 has been approved.
According to the document, SOFAZ’s incomes for 2014 have been fixed at 11,626,943,400 AZN, while costs – 11,349,934,800 AZN. The Oil Fund’s budget proficit with the average annual export oil price of $100 per barrel is forecasted at 277,800,600 AZN. The current SOFAZ budget has been forecasted with the deficit of 1,921,000,000 AZN or about 2,450,000,000. However, it looks like years 2013 will be completed with the proficit of about 1,000,000,000 AZN. There are two reasons for that: high oil prices (during 11 months, 2013 average export oil price was over $110 per barrel) and actual implementation of many SOCAR’s projects started not in early year, but in quarter 3-4, 2013. Thus, the Fund had much less costs.
Income sum (thousand AZN)
| № | Income items | 2013 | 2014 |
| 1 | Net income derived by Azerbaijan from sale of hydrocarbons (not considering SOCARs profit from production sharing agreements (PSA) and joint projects for oil and gas transportation). | 11171072 | 11221286,4 |
| 2 | Per-acre payments of investments within PSA | 1833,1 | 1661,6 |
| 3 | Income from oil and gas transportation on the territory of Azerbaijan | 9223,8 | 6276,0 |
| 4 | Income derives from placement and management of SOFAZ assets | 287448,1 | 379580,7 |
| 5 | Bonus paid by investors for signing and execution of oil and gas agreements | 11963,4 | 18038,7 |
| 6 | Other incomes | 500,0 | 100,0 |
| Total | 11482040,4 | 11626943,4 |
For the first time in 2014 incomes of the Oil Fund will be significantly reduced by 2,053,164,600 AZN against the draft of budgetary costs for this year. The transfers from the state budget will be reduced by 2,013,000,000 AZN.
In 2013 one of the major expenses of the Oil Fund will be funding Azerbaijan’ share in construction of the trans-Anadolu (TANAP) gas pipeline, which is going to reach over $1,000,000,000. Next year SOFAZ will not allocate money to fund Azerbaijan’s share in the project for construction of a modern floating drilling rig in the Caspian Sea. At the end of September 2013 SOFAZ allocated funds to build a new semi-submersible drilling rig in the Caspian Sea worth 60,100,000 AZN. SOFAZ Executive Director Shakhmar Movsumov said that until the end of the year 388,600,000 AZN is planned to be allocated from the Fund. Judging by all, in 2014 SOCAR will independently fund construction of the semi-submersible drilling rig and the funds allocated by the Fund at the end of the year should be enough for the next year.
Sum of expenses (thousand AZN)
| № | Expense items | 2013 | 2014 |
| 1 | Improvement of social and living conditions of refugees and internally displaced people | 300000 | 300000 |
| 2 | Transfers to the state budget of Azerbaijan in 2013 | 11350000 | 9337000 |
| 3 | Funding of reconstruction of the Samur-Absheron irrigation system | 107438 | 80221,3 |
| 4 | Funding of construction of a new railway Baku-Tbilisi-Kars | 138274 ,5 | 132311 |
| 5 | Implementation of the state program for education of Azerbaijani young people abroad from 2007 to 2015 | 34056 | 33680 |
| 6 | Funding of construction of the high-speed fiber optical network, which will connect all settlements of Azerbaijan | 103555,9 | 100000 |
| 7 | Funding of Azerbaijan’s share in construction of the Garadag oil and gas and petrochemical complex | 211950 | 285000 |
| 8 | Funding of Azerbaijan’s share in construction of Star oil refining complex in Turkey | 596600 | 223582,5 |
| 9 | Funding of Azerbaijan’s share in TANAP | 86350 | 800000 |
| 10 | Funding of Azerbaijan’s share in construction of a new floating drilling rig in Caspian Sea | 388575 | - |
| 11 | Costs for Oil Fund’s management | 86300 | 58140 |
| Total | 13403099,4 | 11349934,8 |
* According to SOFAZ, by October 1, 2013 the Fund’s assets totaled $35,800,000,000.—0--
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