Home  »  Afghanistan  »  Afghanistan Signs First Oil Contract With China, Not US

Dec 29, 2011 13 Comments ›› Angelia

CNS:

Afghanistan’s government signed a deal Wednesday with China’s state-owned National Petroleum Corporation, allowing it to become the first foreign company to exploit the country’s oil and natural gas reserves.

The contract, which covers the northeastern provinces of Sari Pul and Faryab, is the first of several such blocks to be put on the market in coming months, Afghan Minister of Mines Wahidullah Shahrani said during the signing ceremony.

Bidding information for blocks in neighboring Balkh province will be released at end of February, and for the western Herat province by next summer, he said.

The ministry listed the initial value of the project with CNPC as $700 million. But the total could be ten times greater if more reserves are found and developed, and if international oil prices remain at today’s levels, Shahrani said.

The fuel pact allows the Chinese firm to research oil and natural gas blocks in Sari Pul and Faryab, an area known as the Amu Darya River Basin that was first explored by Soviet engineers in the 1960s. The Soviets estimated the reserves at about 87 million barrels, but both the Afghan and Chinese partners believe they will prove to be much larger.

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