The State Oil Fund of the Republic of Azerbaijan, also known by its abbreviation SOFAZ, is a sovereign wealth fund of Azerbaijan founded in December 1999. Nearly all the fund's revenues come from Azerbaijan's oil and gas exports. The fund has been criticized for its lack of transparency and for enriching Azerbaijan's political elites.

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. Statute of the State Oil Fund was approved by the Decree of the President of the Republic of Azerbaijan No. 434 dated December 29, 2000. 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. 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. 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.

Others

In June 2024, SOFAZ announced a plan to invest US$100 million in Dubai-based GEMS Education.

Awards

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