TEHRAN (Commodity Online) : Iran said it is to create a national energy fund to meet the need for capital for oil and gas projects.

According to Iran’s oil ministry, "The special fund will be created through cooperation with four state banks as well as the Central Bank of Iran,".

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In a statement, the ministry said, Iran could only attract the investment needed in its energy projects via buy-back contracts or banks loans, noting that according to the Iranian constitution, the country cannot share oil and gas reserves with foreign firms.

"By this initiative, not only the internal sources would be used (in energy projects) but also the ground would be paved for the presence of domestic companies in the oil industry projects," it said.

Iran's fifth five-year development plan (2010-2015) has obliged the government to invest around $155 billion in the upstream sector of the oil and gas industry.

The ministry said that the country's gas sector needed to attract about $85 billion in investments within 10 years in order to maintain its export capacity.

Iran has been facing US-led sanctions aimed at deterring foreign investments. Nevertheless, Iran possesses the world's second largest gas reserves, which comprise almost 16 percent of the world's total.

Asian economies are more active in Iran's energy sector than those in other parts of the world and countries such as India, China and Turkey are considered to be less susceptible to US-led pressure.