The parliament's integration committee authorized the oil ministry to sell 50,000 billion rials ($1.9 billion) in fixed rate participation bonds in order to invest in development of joint oil and gas fields, Shana news agency reported Wednesday.
The committee's ruling is aimed at speeding up development projects of the joint fields, with South Pars gas filed being the foremost priority, Esmaeil Jalili, a member of the committee said following a meeting between lawmakers and oil minister, Bijan Namdar Zanganeh.
Islamic bonds have existed in Iran since 1994 in the form of “participation bonds” issued by municipalities or large companies to finance projects. However, the participation bonds are redeemable on demand and at face value from the issuing agent and are therefore not suitable for secondary trading, according to an IMF report.
Repayment of the bonds is envisaged through the sales of oil products.
One other proposal was to allocate $5 billion from the National Development Fund of Iran (NDFI). The motion failed to receive the votes it needed to pass. NDFI is the country's sovereign wealth fund, founded in 2011 to transform oil and gas revenues to productive investment for future generation. It is currently said to be worth $62 billion.
Since 1990s, oil ministry officials have often spoken of the need to prioritize the development of shared oil and gas fields, expressing something of a use-it-or-lose-it concern. But despite all the motivation to do something, little has been done beyond the highly prioritized South pars gas field.
The Economy Council, chaired by First Vice President Es'haq Jahangiri, approved a comprehensive plan on Dec. 30 to develop joint oilfields at a cost of $15 billion over four years.
Iran owns a number of joint fields with Qatar, Saudi Arabia, and Iraq.
