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“By end of this (Iranian) year (March 2011), we will issue bonds worth 11.5 billion euros to help finance oil and gas projects as well as building power plants,” said first Vice-President Mohammad Reza Rahimi.

Oil Minister Massoud Mirkazemi said in May that Iran needs around $25 billion a year in oil and gas industry investment and could turn into an importer of oil because of the lack of such funds.

One of the world’s biggest oil and gas producers, Iran has been hit by U.S. and U.N. sanctions that have frightened away international energy firms.

The Islamic state has increasingly turned to Asian firms instead but they often lack the technology to implement oil and gas projects.

Tougher EU sanctions does not only target Iran’s energy sector

Ambassadors from the 27 E.U. member states met in Brussels to endorse the sanctions, which include measures against the oil and gas industry and must be approved at a meeting of foreign ministers on Monday to come into force.

“The text on the restrictive measures against Iran have been adopted,” the diplomat said on condition of anonymity.

The U.N. Security Council imposed a fourth set of sanctions on Tehran in early June, but E.U. leaders and the United States decided shortly after to impose their own penalties against the Iranian energy sector.

The sanctions are part of a twin-track approach with E.U. foreign affairs chief Catherine Ashton seeking to revive moribund talks between Iran and six world powers — the United States, Britain, France, Germany, Russia and China.

Western powers have demanded that Iran suspend its uranium enrichment program, fearing that Tehran would use the material to build a nuclear bomb. Tehran says that its atomic program is a peaceful drive to produce energy.

E.U. leaders agreed at a June 17 summit to impose a ban on new investment, technical assistance and technology transfers to Iran’s huge gas and oil industry, particularly for refining and liquefied natural gas.

Iran is the world’s fourth largest producer of crude oil but it imports 40 percent of its fuel needs because it lacks enough refining capabilities to meet demand.

The U.S. and E.U. sanctions, seen as much tougher than U.N. sanctions, were “expected to have a material impact on the country’s energy industry,” the International Energy Agency said.

The IEA noted that it was “significant” that China and Russia had agreed to back the UN sanctions but that those did not include specific measures aimed at Iran’s energy sector.

The U.S. and E.U. sanctions were harder, and “longer term, development of the country’s oil and gas industry will clearly be adversely impacted”, the IEA said. “Iran’s growing gas and natural gas liquids projects are expected to be hardest hit.”

The E.U. measures also target the Islamic republic’s transportation, banking and insurance sectors, and slap new visa bans and asset freezes on the Islamic Revolutionary Guard Corps.

EU sanctions to deter Iran and bring it to the negotiation table

“These sanctions are surprisingly strong,” said Mark Fitzpatrick, director of the nonproliferation program at the International Institute for Strategic Studies in London. “They go much further than the UN sanctions.”

Fitzpatrick added: “For the first time Iran will face biting sanctions that will significantly impact its economy.”

The sanctions “could nevertheless give reasons to Iran to go back to the negotiating table,” he said.

“In the past, Iran has always moved once it was under pressure of the international community.”

Also, the EU foreign ministers, during their meeting on Monday, will urge Iran to set a date for new talks.

The last high-level talks between Iran and the six world powers were held in Geneva in October 2009 when the two sides agreed a nuclear fuel swap that has since stalled.

Iranian Foreign Minister Manouchehr Mottaki said last week that talks could begin in September after Ashton reached out to Iran’s chief nuclear negotiator Saeed Jalili in a letter in June.

According to the draft conclusions, E.U. foreign ministers will call on “Iran to seize this opportunity to allay the concerns of the international community about its nuclear program and agree on a concrete date for talks with the E.U. High Representative, together with the six countries.”

UAE gives its back to Iran’s attempt to switch its crude-oil sales currency

Iran will switch to currencies other than euros and dollars for payment of its oil exports, a senior Iranian official was quoted on Friday as saying by the semi-official Mehr news agency.

“We are free to choose any currency for our oil sell and this issue depends on Iran’s interests…the important issue is to exclude euros and dollars,” said Mohammad Reza Rahimi.

“We will shift from euros and dollars to any other currency.”

To avoid this, Iran has been discussing shifting to other currencies, most notably to the dirham, however the United Arab Emirates central bank governor dismissed on Tuesday reports that Iran may seek payment in dirhams for its oil exports to Europe to get around sanctions.

Rahimi said shifting to dirhams “depended on the country’s national interests”.

The dollar is the standard currency for oil trade, but Iran had shifted to the euro for European deals in response to years of U.S. sanctions against the Islamic Republic.

Oil transactions can in theory be carried out in whatever currency the parties involved decide.

Iran still claims that its nuclear development program is only for peaceful purposes.