Baku: Projected inflows from the sale of profit oil and gas by the State Oil Fund of the Republic of Azerbaijan (SOFAZ) for the next year are expected to decrease by 12.7% compared to the 2025 projection. This decline is attributed to reduced production volumes and a lower average annual export price of crude oil.
According to Azeri-Press News Agency, the Chamber of Accounts’ opinion on SOFAZ’s 2026 budget indicates that the net revenues from the sale of hydrocarbons attributable to Azerbaijan are forecasted to be USD 5,030 million or 8,551 million manats. This projection represents a decrease of 2,910.4 million manats, or 25.4%, from the actual performance in 2024, and a reduction of 1,246.3 million manats, or 12.7%, compared to the 2025 forecast.
The draft 2026 budget of the State Oil Fund considers the volume of profit oil and gas attributable to Azerbaijan from specific oil and gas fields. However, revenues from the Kursangi and Garabaghli fields are not expected to be transferred to SOFAZ in 2026 under the USD 65.0 price scenario. The report explains this due to a reduction in the state’s profit share to 40% following amendments to the PSA, which is insufficient to cover contractors’ tax obligations from the state’s profit share.
Further, SOCAR’s stakes in the Shah Deniz and South Caucasus Pipeline projects were fully transferred to the Southern Gas Corridor CJSC on March 31, 2023, following the Deferred Share Purchase Agreement. SOCAR’s letter to the Fund dated June 25, 2023, stated that while payments from SOCAR’s stakes in these projects were planned to begin in 2025, no funds have been transferred to the Fund as of the reporting date. However, the Fund’s 2026 budget anticipates receiving USD 136.2 million from this source.