TEHRAN- Iranian Finance and Economic Affairs Minister Farhad Dejpasand said that the plan for offering oil via salaf bonds in Iran Energy Exchange (IRENEX) is temporarily stopped, Tasnim news agency reported.

Speaking in a live TV program, the minister said that the first session for investigating the issue of selling oil via salaf bonds was held, the Economy Council approved the plan, but it will not be implemented now due to some reasons.

IRENEX was due to offer crude oil via standard parallel salaf bonds on August 16, but in an announcement, in the mentioned date the exchange stated that the offering was postponed.

National Iranian Oil Company (NIOC) had planned to offer 20 trillion rials (about $476.1 million) worth of heavy crude oil in IRENEX through standard parallel salaf contracts (some kind of Islamic contract), and IRENEX Managing Director Seyed Ali Hosseini had elaborated on the details of the offering on August 15.

According to Hosseini, the fund raised through this offering is going to be used to finance the oil industry’s development projects.

“National Iranian Oil Company is the issuer of the salaf bonds and the purpose of this offering is to finance the company’s development projects and its current expenses; the offering will be conducted under two separate indices,” Hosseini explained at the time.

A standard parallel salaf is an Islamic contract similar to futures, with the difference being that the contract’s total price must be paid in advance.

Hosseini noted that each salaf contract has an equivalent value of one barrel of heavy crude oil which is priced at 9.446 million rials (about $224) in Iran.

Mentioning the difference between the initial public offering of parallel Salaf contracts and a plan proposed by President Hassan Rouhani called oil pre-sale (or economic breakthrough), the official said the president’s plan is currently going through the expert assessment processes and is not yet finalized.

This plan will also be implemented and the shares will be offered at the energy exchange as soon as it is approved by the relative assessing bodies, he added.

MA/MA