Its mission is to transform depletable hydrocarbon reserves into financial assets generating perpetual income for current and future generations and the financing of strategically important infrastructure and social projects of national scale.
The major sources of income for SOFAZ are:
- Proceeds generated under production sharing agreements from sales of Azerbaijan's share of hydrocarbons
- Bonuses paid under the terms of production sharing agreements
- Acreage fees paid by foreign investors for use of the contract areas in connection with the development of hydrocarbon resources
- Dividends paid under the terms of production sharing agreements
- Revenues generated from the transit of oil and gas over the territory of Azerbaijan
- Revenues generated from the transfer of assets from investors
- Revenues from management of SOFAZ assets
- Grants and other disinterested aid
SOFAZ also helps Azerbaijan weather economic crises and, through transfers to the state budget, support Baku’s efforts to diversify from hydrocarbons. For oil-based economies, a sovereign wealth fund can help plan for a future when oil incomes are depleted.
The State Oil Fund revenue usually depends on oil prices and the export earnings the country receives from its oil and gas.
Assets of the Oil Fund increased by 46.2% from 2011 to 2020. Budget revenues of Azerbaijan's SOFAZ from the major oil & gas fields amounted to $3.8 billion in 2020. As of January 1, 2021, the Fund’s assets totaled $43.5 billion.
