Instead of borrowing cheaply in global markets, Gulf oil and gas firms are seeking to promote Islamic finance, according to a report from Reuters.

Middle East state-owned oil and gas companies from the oil exporting region are the primary sources that issue sukuks, or Islamic bonds, as more petrodollars remain in the booming region because of record oil prices. The anticipated spending spree by oil firms to finance to develop the energy industry and boost output capacity could be what is causing its bond market to go global, the report said.

Sukuks, which are bonds that comply with Shariah law under Islam, are unlike conventional bonds since they do not pay interest. However, they are secured by the underlying value of the asset being financed. European and U.S. investors are increasingly buying Islamic bonds as the oil-rich Gulf economies sharply increase issues, according to a research.

Excess liquidity and increasing demands for investments that comply with Shariah, make it easy for firms to raise funds, added the report.

The first sukuk issued in Saudi Arabia, an $800 million offer from Saudi Arabian Basic Industries Corp (SABIC), was oversubscribed in July.