Baku: The State Oil Fund of Azerbaijan (SOFAZ) is taking proactive measures to address risks and uncertainties in the oil and gas sector, as explained by Israfil Mammadov, Executive Director of SOFAZ, in a recent interview with APA-Economics. The fund's budget for the upcoming year has been meticulously aligned with the state budget, relying on medium-term oil price forecasts from international organizations.

According to Azeri-Press News Agency, Mammadov emphasized that maintaining SOFAZ's budget indicators and ensuring the sustainability of its assets are key priorities when shaping the consolidated budget, which includes the state's revenue and expenditure plans. The fund anticipates potential fluctuations in oil prices and prepares for possible revenue declines through robust planning and risk management strategies. Moreover, the income generated from investment activities plays an increasingly significant role in offsetting any reduction in oil revenues.

Mammadov highlighted that SOFAZ's diversified investment strategy is formulated by considering the risks and uncertainties associated with the future of the oil and gas sector. The fund's portfolio management decisions are based on a comprehensive model and prudent assumptions, rather than relying on a single indicator. Additionally, maintaining a suitable level of liquidity within the portfolio is crucial for fulfilling budget obligations, with liquid assets such as bonds and money market instruments providing fiscal flexibility.