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Cabinet endorses oil deal with China

in Afghan Business

Cabinet endorses oil deal with China

Endorsing a deal with China on developing a small oil and gas field in northern Afghanistan, the Cabinet on Tuesday agreed to the creation of a joint working committee to explore energy deposits at the Amu River basin.

Last year, state-run China National Petroleum Corporation (CNPC) won the first oil deal in Afghanistan after signing a contract with the government to develop the oil-field in Sar-i-Pul province.

Under the agreement CNPC will initially invest about $400 million in the oil exploration project that is expected to generate $7 billion in revenues for the war-torn nation.

During a meeting at the Presidential Palace, the Cabinet authorised Mines Minister Wahidullah Shahrani to sign an agreement with China on the proposed joint working committee.

Beijing has recently evinced a keen interest in building a pipeline transporting natural gas to China from Turkmenistan via Tajikistan and Afghanistan.

CNPC Chairman Jiang Jiemin referred to the plan at a meeting with President Hamid Karzai on the sidelines of the 12th Shanghai Cooperation Organisation (SCO) summit in Beijing.

A CNPC delegation is expected to visit Afghanistan this month to sign a memorandum of understanding with the Karzai administration on pushing the proposal.

Seeking Afghanistan’s assistance, Jiemin said the firm was keen on carrying out technical and economic feasibility studies for oil and gas-fields at the Amu River basin and the proposed pipeline project.

Karzai said the two projects were of great importance and Afghanistan’s stability and development was dependent on increased economic ties with China.

The Ministry of Mines says initial estimates indicate 87 million barrels of oil in the field that is likely to contain even more reserves. It is also optimistic of the existence of gas in the area.

Source: Pajhwok News Agency by Abdul Qadir SiddiquionJun 12, 2012 – 15:16

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