TEHRAN, Iran, Aug.11
Trend:
Sale of Iran's oil bonds would have profit for buyers and finance downstream projects, Spokesman of Oil, Gas & Petrochemical Products Exporters' Association (OPEX) Hamid Hosseini told Trend in an interview.
"The working group has discussed the plan of introducing oil bonds with the government," he said. "One of the functions of oil bonds in the world is to generate income to facilitate investment in oil projects," he said.
"Iran is currently facing sanctions and its oil revenues have declined; on the other hand, there are no financial sources for construction and development of oil, gas and petrochemical projects. Shutting down these projects would lead to unemployment and create problems in production," Hosseini added.
"Iran can not sell oil in current situation due to low prices, so it is better to pre-sale oil in bonds; people would profit from it and practically turn their capital from rial to dollar. Furthermore, the people will not personally enter foreign currency market; they will invest their money on a barrel of oil in dollar and gain profit," said the spokesman.
"The plan is to issue bonds for three years; given that it is predicted that oil price would increase in mid-2021, buyers will benefit from the increase of oil price and possible increase of USD rate, while this will help finance oil and petrochemical projects," he noted.
"The increase of gold price and foreign currency rate alongside risks in stock exchange created concern for people over their investment. While bank interest rate is 16 percent, it negatively affects investment profit, as inflation rate is 30 percent; therefor, people are certainly not willing to invest their savings in banks," he said.
"If oil bonds are exempted from tax and the government set the price floor for the bonds, people's capital will go toward production." he said. "People's investment is guaranteed by upstream organizations and it has been approved by the Council of three powers that is the highest authority after the Supreme Leader."
"Iran's refineries currently have production capacity of 1.8 million tons of oil, and 300,000 to 400,000 barrels of condensate. If the volume increases to 2.5 million barrels, the consumption will increase, so the government will sale more crude oil and more petrochemical products will be produced, which will provide for paying the bonds profit to buyers," Hosseini added.
"It is predicted that oil bonds could be traded at the stock exchange. I am confident that anyone who purchases bonds will have at least 60-percent profit in dollars possible from increase of oil price and USD rate," he said.