Iran’s media reported on Tuesday that the country plans to sell bonds worth a total of about $1.7 billion next year in a campaign meant to provide funds for the development of key energy sector projects.
The campaign – which received a go-ahead in a meeting of Iran’s High Economy Council (HEC) – will involve selling bonds in rials and euros in domestic and foreign banks. It will start from the next Iranian calendar year (21 March 2016-2017).
The funds thus obtained will be used for increasing Iran’s oil production capacity by about 300,000 barrels per day (bpd) and its gas production capacity by 48.6 million cubic meters (mcm) per day.
The US-engineered sanctions against Iran have restricted the country’s access to foreign investments that it requires to develop its oil sector.
To overcome this, Iran under former president Mahmoud Ahmadinejad (2005-2013) launched several rounds of a massive borrowing campaign through selling bonds with high rates of return in domestic and overseas banks to attract funds for its oil and gas projects.
The value of each borrowing round – that comprised offering dollar-dominated and rial-dominated bonds - stood in billions of dollars.
Most of the funds that were expected to be attracted were said to have been targeted for projects in South Pars energy hub which Iran jointly shares with Qatar.
The government of President Hassan Rouhani has already announced that it will expand this scope to include oil fields that Iran shares with Iraq – many of them already seen to have promising prospects.