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China, Afghanistan sign first oil contract

12-29-2011 08:33 BJT

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The Afghan government has concluded a deal with China's state-owned National Petroleum Corporation. This allows it to become the first foreign company to exploit Afghanistan’s oil and natural gas reserves.

The contract covers the northeastern provinces of Sari Pul and Faryab. The government lists the initial value of the project as 700 million US dollars.

 

Red Army soldiers cross the Amu Darya river. Afghanistan on Wednesday signed an oil deal
with China which could earn the war-torn country $7 billion over 25 years.

But the total could be ten times greater, if more reserves are discovered. Oil and natural gas reserves in the two provinces is estimated at about 87 million barrels, and may prove to be much larger.

CNPC also plans to build a refinery - Afghanistan’s first - within the next three years. CNPC says this will follow once the real size of reserves is determined with greater accuracy.

Under the deal, the Afghan government is set to receive 70 percent of sale profits from the valuable resources.

CNPC will also pay 15 percent in royalties, as well as corporate taxes and rent for land used for its operations.

 

Editor:Zhang Rui |Source: CNTV.CN

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