Iran's central bank opens $10 billion credit line for oil projects

07/13/12

The Central Bank of Iran has opened a $10 billion line of credit for a number of domestic oil projects in the upstream sector, a planning and supervision affairs official at the Oil Ministry said.

Central Bank of Iran

Mohsen Khojasteh-Mehr told the Shana News Agency on Wednesday that a list of prioritized projects will be introduced to the Central Bank in the near future.

"Benefiting from 18 percent of assets of the National Development Fund; issuing $10 billion in foreign currency bonds; issuing 15 trillion rials in bonds; and selling $10 billion worth of shares and properties of the Oil Ministry are among other sources of finance for the oil projects," he added.

Iran's Oil Ministry

The European Union's oil embargo on Iran took effect on July 1 and a new U.S. law that penalizes countries that do business with the Central Bank of Iran by denying their banks access to the United States financial markets. The law came into force on June 28.

On July 2, the National Development Fund and the Oil Ministry signed an agreement, based on which the NDF will earmark $14 billion of its assets to oil industry projects.

Over 70 percent of the sum will be spent on the development of oil and gas fields as well as expanding the upstream sector of the oil industry, Oil Minister Rostam Qasemi said, adding that the rest will be channeled into the refining industry.

President Mahmoud Ahmadinejad has said that the National Development Fund's assets will hit $55 billion by the end of the year (March 20, 2013).

According to the Fifth Five-Year Development Plan (2010-2015), the National Development Fund was established to transform oil and gas revenues to productive investment for future generations.

Iran transfers 20 percent of oil revenues to National Development Fund.

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