China National Petroleum acquires the right to exploit oil in Afghanistan and will build a refinery in the country

According to foreign media, citing Abdul Jalil Jumriany, head of policy of the Ministry of Mines of Afghanistan, CNPC won the bid for the first oilfield exploitation rights in Afghanistan last month and promised to build an oil refinery in the country.

The official disclosed that in the bid for exploitation rights, CNPC obtained the mining rights in three blocks in the northern part of Afghanistan and will therefore pay the Afghan government a 15% mining tax, a 30% corporate income tax, and a local oil refinery. The mining tax quoted by Buccaneer Energy of Australia is 10%, ranking second in the bid and failing to win.

The report revealed that the above transaction will be completed within one month. This will ensure that China continues to be the largest foreign investor in Afghanistan.

The Afghan government approved last month that PetroChina explored oil in the above-mentioned three blocks of areas close to Turkmenistan and Uzbekistan in Afghanistan. After acquiring the right to extract oil from the above-mentioned areas with estimated reserves of 80 million barrels, CNPC may also seek to obtain a larger block of oil and natural gas reserves in the Afghan-Tajikistan border area.

The officials also disclosed that the Afghan government plans to conduct the next auction of oil exploitation rights in February 2012.

In addition, the Deputy Minister of the Ministry of Mines of Afghanistan stated that the size of the proposed refinery is negotiating with CNPC. Once it is confirmed, the two parties may sign a formal agreement in October.