March 14, 2018 / 10:25 AM / 7 days ago

Azeri oil fund to boost state transfers in 2018

BAKU, March 14 (Reuters) - Azerbaijan’s national oil fund SOFAZ plans to transfer up to 50 percent more money to the state budget this year than in 2017, it said on Wednesday.

The $36-billion fund holds the ex-Soviet country’s proceeds from oil contracts, oil and gas sales, transit fees and other revenue.

It transferred 6.1 billion manats ($3.6 billion) to the budget in 2017, a sum it said would rise to up to 9.2 billion manats this year.

Azerbaijan’s economy was hit by the mid-2014 slide in the price of oil, which with gas accounts for about 75 percent of state revenues and 45 percent of gross domestic product.

It stabilised last year, growing 0.1 percent as oil prices rebounded and the service and agriculture sectors expanded.

SOFAZ will allocate this year’s additional funds to agriculture, health and education and infrastructure projects, it said in e-mailed answers to questions from Reuters.

SOFAZ said it planned to add to its holdings in real estate, in which it began investing directly in 2012, towards a target allocation of 10 percent of total assets under management.

“So far over half of this allocation has been invested and the plan is to continue the investments in 2018 and beyond,” with the focus on property in major developed Asia Pacific, European and the U.S cities, it said.

The fund’s 2018 budget projects revenues at 11.56 billion manats and spending including transfers at 9.73 billion, based on an average oil price of $45 per barrel.

Last year’s spending was 11.016 billion manats and revenue 12.138 billion, beating forecasts as oil prices rose.

“We managed to close the year with a surplus of $637 million” instead of a deficit of around $2.4 billion, the fund said.

$1=1.7 manats Additional reporting by Nailia Bagirova; writing by Margarita Antidze; editing by John Stonestreet

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