TEHRAN (AFP) – Sanctions-hit Iran will within days offer the first tranche of a three billion dollar domestic bond issue to fund the development of its South Pars gasfields, a top official said on Sunday.
Ali Vakili, head of Pars Oil and Gas Company, the Iranian firm in charge of developing South Pars, said the funds will be raised in six stages during the current year to March 2011, according to oil ministry’s news agency Shana.
Vakili said state-run Saderat Bank, which is under UN and US sanctions, will be responsible for raising one billion dollars in the first two tranches of the overall issue.
The first part of the offer “will be made on August 21, followed by the second on September 11,” Vakili said. The three-year bonds will carry an interest rate of 16 percent.
Apart from the domestic offering, Iran plans to make an international bond offering of two billion euros over the course of the year to March 2011.
The euro offering is part of an overall three billion euro bond offers planned this year, Vakili said, of which bonds worth one billion euros have already been issued since January.
Vakili did not specify when the next euro bond offering would be made.
He said that Iran had in the past 13 years invested 30 billion dollars in South Pars, the gasfields it shares with the small state of Qatar but needs anther 40 billion dollars to develop it fully.
Iran has planned a massive 200-billion-dollar investment in the energy sector over a five-year period to 2015.
But Oil Minister Masoud Mirkazemi has previously acknowledged that Tehran was facing “shortage of funds for implementing various projects” in the vital energy sector.
Iran, the second largest oil exporter of OPEC, also has the world’s second largest natural gas reserves after Russia.
But the development of South Pars has been hampered by a lack of investment and technology as Western firms have either pulled out or delayed their commitments after new sanctions were imposed on Tehran over its nuclear programme.
Since June the United Nations, the United States and the European Union have imposed new punitive measures against Tehran in a bid to stop its sensitive uranium enrichment programme which they fear masks a weapons drive.
Tehran denies the charge, saying the programme has purely peaceful goals.