Iran to provide US$7 billion for oil projects internally

16:05 | 18/06/2018 Global Economy

Iran says a plan is on agenda to attract funds from domestic resources to maintain production at the country’s key oil fields. 

iran to provide us 7 billion for oil projects internally
Iran's oil output rose to 3,806 million barrels per day - Photo by Reuters

The plan would envisage attracting as much as Rials 300 trillion (around US$7 billion with each dollar at the official rate of around Rials 42,000) through the Iran Energy Exchange (IRENEX), the media in Tehran reported.

IRENEX Managing Director Ali Hosseini told IRNA news agency that the funds thus attracted would be used to support maintenance as well as production projects at 29 oil fields across the country.

Hosseini emphasized that the grounds were already prepared to use domestic resources for oil projects through mechanisms such as “project funds” and “Sukuk” or Islamic bonds.

He added that a special portfolio of investment tools needed to be devised to the same effect, stressing that such a portfolio specifically needed to include foreign investments, domestic investments and IRENEX resources.

The variety of investment tools, the official said, would lower the risks in projects.

Elsewhere in his remarks, Hosseini added that an earlier plan to attract domestic funds for oil projects envisaged attracting equal to US$10 billion. However, the official said, the recent fluctuations in Iran’s currency market had led to a change in targets.

Earlier, Iran’s Oil Minister Bijan Zanganeh had said that the plan to use domestic resources to fund oil projects would help increase Iran’s production at target fields by a collective volume of 460 million tons in three years.

IRNA further wrote that Ali Kardor, the managing director of the National Iranian Oil Company (NIOC), had announced that the country’s first ever ‘project fund’ to provide the resources required for maintaining and increasing oil production had been created.

Kardor had added that projects worth a total of above US$6.3 billion had been defined to the same effect which he said would be supported by means of the same ‘project fund’.

He had also said that certain investment blocs had been devised for the fund which he said would be sold to the public based on each dollar at the official rate of Rials 42,000.

Kardor added that the profits for the investments would be calculated based on the current price of the dollar.

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