CNPC and Afghan Officials Comment on Oil Deal

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We told you yesterday about that major oil deal between the government of Afghanistan and the China National Petroleum Corporation. Now the president of that company and the Afghan Minister of Mines are speaking out about the landmark agreement.

On Wednesday, the Chinese state-owned company China National Petroleum Corporation, or CNPC, signed a 25-year contract with Afghanistan. CNPC is the first foreign company to win a major oil deal in Afghanistan.

The Chinese regime will gain access to millions of barrels of oil—while Afghan authorities expect to reap billions of dollars in revenue over two decades.

The contract covers oil exploration and production in the northern Afghan provinces of Sar-e Pul and Faryab.

In a joint venture CNPC and Afghan company Watan Group will search for oil in the Amu Darya River basin. The basin is believed to hold nearly 90-million barrels of oil.

CNPC president Lu Gongxun does not have the exact investment figures.

[Lu Gongxun, President, China National Petroleum Corp]:
"For the development, we can only give you the rough number for initial investment. Based on my experience, for it to be a minimum of around 400-million US dollars."

Afghanistan's Minister of Mines says the oil project will open hundreds of career opportunities for Afghans.

[Wahidullah Shahrani, Afghan Minister of Mines]:
"Indeed today is a historical day in Afghan history, this is the first time that Afghanistan signs a great contract for its country's oil exploitation."

Shahrani says oil prices will vary according to global market fluctuations.

[Wahidullah Shahrani, Afghan Minister of Mines]:
"The term of contract will be 25 years long, the cost of each barrel will depend on the time of exploitation and will be counted based on cost of oil in the international market."

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