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Wed 16 Sep 2009 08:58 PM

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Iran aims for euro bond issue by Dec for gas work

Republic plans to invest around $40 billion to develop the South Pars field through 2015.

Iran plans to offer a 1 billion euro ($1.40 billion) bond by December to help finance development of its largest natural gas field, the Oil Ministry website SHANA on Wednesday quoted a senior official as saying.

Iran plans to invest around $40 billion to develop the South Pars field through 2015. The field is part of the huge formation shared with Qatar that makes up the world's largest pure gas reserve.

But Iran has struggled to find the cash and the technology to develop this and other fields as sanctions and political pressure have kept foreign firms away.

"Issuance of the bonds is expected to be finalised in two months," Mohammad Hassan Mousavizadeh, a senior adviser to Iran's Pars Oil and Gas Company (POGC) told SHANA.

Government first needed to approve regulations related to the bond issue, he said.

State oil giant the National Iranian Oil Company (NIOC) has already given POGC permission to issue the bonds.

New Oil Minister Massoud Mirkazemi has pledged to boost natural gas output from the world's second-largest reserves.

The Islamic Republic has increasingly turned to Asia for cash and know how to develop oil and gas fields. State-owned Asian firms are hungry for energy supplies to feed future growth and less susceptible to Western pressure to stay away.

Mousavizadeh said in July the bonds would be offered to both Iranians living abroad and foreign investors, but an oil official told Reuters in June Iran was in talks with Asian banks on the currency-denominated bond for South Pars.

Western firms are wary of investing in Iran for fear of US and UN sanctions. Washington is putting pressure on Iran over its nuclear programme, which Tehran says is for peaceful purposes but which the West suspects is aimed at making bombs.  (Reuters)

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