A number of agreements on joint development of oil and gas resources were signed with foreign investors in the frame of Oil Strategy, created by national leader Heydar Aliyev. The issue on effective management of revenues from implementation of these agreements was brought to agenda. For this purpose the State Oil Fund of the Republic of Azerbaijan (SOFAZ) was established in accordance with the Decree of the President of the Republic of Azerbaijan dated December 29, 1999.
The State Oil Fund in Azerbaijan was established as the legal entity with separate management structure and not as special account in the central bank. This is one of the distinctions of the State Oil Fund. Connection between Oil Fund’s revenues and expenditures, and state budget is built only within bounds of a summary revenues and expenditures of public administration sector and pursues a goal of following a single macroeconomic policy. The assets of the Fund could not be used for lending to state authorities, state and non-state organizations and as guarantee for the liabilities of any subject.
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