Iran to sell bonds worth $13b to finance South Pars phases
Azerbaijan , Baku, March 11 / Trend, A.Yusifzade /
Iran plans to sell bonds worth $13 billion to finance the development of phases 12, 15, 16, 17 and 18 of the South Pars gas field during the next Iranian year (starting March 21, 2011), Fars News Agency reported quoting the Deputy Head of South Pars phases 12, 15, 16, 17 and 18, Mohammad Reza Zahiri as saying.
Earlier Iranian Oil Minister Seyed Massoud Mir Kazzemi said that launching all the South Pars gas field phases requires $60 billion investment in upstream sector of the field up to the end of Twenty Years Outlook in 2025.
When all phases of the South Pars field become operational, the annual revenue of the field will soar to $100 billion, raising Iran's gas output to 1.1 billion cubic meters per day, Mir Kazzemi said.
The managing director of the National Iranian Oil Company (NIOC) Ahmad Qalebani reported of issuance permits by Central Bank of Iran (CBI) on offering oil industry foreign exchange denominated bonds by domestic branches of Iranian banks for the first time, Shana reported.
Qalebani said that last week for the first time Central Bank of Iran (CBI) permitted Pars Oil and Gas Company (POGC) to issue foreign exchange denominated bonds through domestic branches of Iranian banks.
Under the CBI licenses, foreign exchange bonds would be offered by Bank Saderat, Bank Tejarat and Bank Sepah as of March 12, 2011 , Qalebani added.
NIOC managing director remarked that foreign exchange bonds would be nameless documents that under the law would be used as financial instruments to fund oil industry projects in the form of 1.000, 5.000, 10.000, 50.000 and 100.000 euro papers.
Iran has allocated bonds worth some $6.3 billion for its oil and gas industry to help finance development of its energy projects in 2010, Qalebani said.
According to managing director of the Pars Oil and Gas Company (POGC) Ali Vakili, all the allocated bonds to Pars Oil and Gas Company (POGC) were sold due to special attention of the government and the minister of petroleum efforts. Part of other company's bonds was redirected to POGC to finance the development of the South Pars gas field projects.
This year budget permits Iranian ministry of petroleum to issue nine billion euro denominated bonds of which 5 billion euros were allocated to POGC.
With eight percent profit the nameless and tax free bonds have tenure of four years and could be transferred to third persons.
Referring to possibility of redemption of the bonds before the maturity date, the official continued: one year profit for redeemed papers is calculated based on 5.5 percent, for up to two years papers 6 percent, for up to 3 years papers 7 percent and for up to four years papers 7.5 percent that would be paid by issuer through agent banks.
'Even though oil industry financial resources have been often met through finance and buyback means but today there are other ways to fund the project that using them requires passing law and setting appropriate mechanism,' NIOC managing director noted.
The company's mandate is the development of the South Pars gas field and North Pars gas field.
The South Pars field is a gas condensate field located in the Persian Gulf. It is the world's largest gas field and is shared by Iran and Qatar. According to the International Energy Agency, the field holds an estimated 50.97 trillion cubic meters (1 ,800 trillion cubic feet) of in-situ gas and some 50 billion barrels of condensates.