CNPC bags first Afghanistan oil exploration deal
27 Dec 2011
The Afghanistan cabinet yesterday approved a deal with China National Petroleum Corporation (CNPC) for oil exploration and extraction, giving the Chinese state-owned company access to millions of barrels of oil in the war-torn country.
The oil exploration and production deal, which will be the first given by Afghanistan to an international oil company after several decades, is for the development of oil blocks in the Amu Darya basin in the relatively peaceful north-west region of the country.
In partnership with Afghan company Watan Group, CNPC will develop three oil fields, Kashkari, Bazarkhami and Zamarudsay, which is estimated to hold around 87 million barrels of oil.
Watan Group is in the telecommunications, logistics and security services business and is owned by the Popal brothers, cousins of the Afghan president, Hamid Karzai.
"The Afghan cabinet has ordered mines minister Wahidullah Shahrani to sign an oil exploration contract for Amu Darya with China National Petroleum Corporation," the Afghanistan president's office said in a statement.
Under the deal, CNPC will pay a 15-per cent royalty on oil, a corporate tax of 20 per cent, and up to 70 per cent of its profit from the project to the Afghan government.
