SOFAZ reveals reason for sharp increase in revenues from ACG, Shah Deniz

The January increase in revenues of the State Oil Fund of Azerbaijan (SOFAZ) from the Azeri-Chirag-Guneshli (ACG) block of fields and the Shah Deniz gas condensate field was due to a growth in the state's share of profit oil, the sale price of profit condensate, and high European spot gas prices, SOFAZ told Report.

In January of this year, compared to the same period in 2021, the state's share of profit on the ACG project increased significantly, and as a result, under the provisions of the Production Sharing Agreement (PSA), an increase in the amount of profit oil per share was observed in the mechanism of formation of the state's share of profit on the project.

In accordance with the provisions of the agreements concluded between the parties on the purchase and sale of gas under the Shah Deniz project, the state's gas revenues paid to SOFAZ on the project in January 2021 were lower than in the same period of 2022 due to the application of certain conditions: "At the same time, another reason for the increase in revenues for the relevant period is the significant increase in the selling price of state-owned profit condensate and the impact of the delivery of Azerbaijani gas to Europe over the Shah Deniz project and high European Hub (spot) prices."

In January 2022, the revenues of the SOFAZ from the Azeri-Chirag-Guneshli block of fields amounted to $683.114 million, up 2.8-fold from $244.946 million in the same period of 2021. The revenues from the Shah Deniz field amounted to $149.899 million, 42.4-fold more than a year earlier.