Iran to channel 3% of oil income into South Pars

Iran Materials 16 June 2009 11:25 (UTC +04:00)

TEHRAN (MEHR - Trend )

Iran's cabinet has approved the oil ministry's proposal for the allocation of 3 percent of monthly crude oil income to the South Pars gas field development projects.

The Central Bank of Iran (CBI) is obliged to remit 3 percent of the monthly crude sales to the National Iranian Oil Company's account, the Mehr News Agency reported on Sunday.

Iranian Oil Minister Gholam-Hossein Nozari said in May that $2 billion will be drawn out of the Foreign Exchange Reserve Fund to be used for the South Pars development plans. The announcement came about a week after Nozari said Iran plans to issue bonds worth 1 billion euro ($1.4 billion) to fund the SP development projects.

Iran sits on top of the world's second-largest gas reserves after Russia.

South Pars field is a gas condensate field located in the Persian Gulf. It is the world's largest gas field, shared between Iran and Qatar.

South Pars gas reserves are estimated at 450 trillion cubic feet, roughly half of all total gas reserves in Iran.

The gas field covers an area of 9700 square kilometers, of which 3700 square kilometers (South Pars) is in Iranian territorial waters and 6000 square kilometers (North Dome) is in Qatari territorial waters.