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CNPC, the Chinese energy company, is poised to win the first oilfield to be tendered in Afghanistan since the U.S. ousted the Taliban in revenge for sheltering Osama bin Laden a decade ago.

China's push into Afghanistan is part of a broader drive to secure resources to fuel economic growth that has seen its state-owned companies venture into increasingly risky countries.

CNPC, China's biggest oil and gas producer, beat rival bids from Australia's Buccaneer Energy, London-based Tethys Petroleum and Shahzad International of Pakistan in a tender for three blocks in the Amu Darya basin in the relatively peaceful north-west.

The state-owned company has a history of working in tough political environments shunned by western companies, including Sudan, Burma and Iran.

The Afghan government has ordered the mining ministry to negotiate the details of the contract before a final decision is made.

"CNPC gave the highest bid," Jalil Jumriany, head of policy and promotion in Afghanistan's mining ministry, told the Financial Times.

"It depends on how the negotiation goes on and then the final winner will be chosen."

CNPC appears to have offered a similar combination of attractive royalties and promises to develop infrastructure that helped a Chinese consortium win a bid for Afghanistan's $3.4-billion Aynak copper deposit in 2008.

Mr. Jumriany said CNPC had offered to pay a 15 per cent royalty on each barrel of crude and 30 per cent corporation tax on its profits, as well as build a $300-million refinery. CNPC declined to comment.

Afghan officials have been keen to tout the country's mineral resources – including the vast Hajigak iron ore deposit that has attracted interest from mainly Indian companies. A lack of exploration means the country's true oil and gas potential remains largely unknown.

"What CNPC is doing here is taking a position on relatively unknown oil assets at potentially low prices," said Bradley Way, Beijing-based head of Asia energy for BNP Paribas.

CNPC's foray into Afghanistan mirrors the way the company has made strides in Iraq, where it has also gained a foothold in the wake of the US-led invasion. CNPC is providing services for Iraq's biggest oilfield, in conjunction with BP and an Iraqi group.

Although the Amu Darya blocks are only estimated to contain about 80 million barrels of oil, a tiny amount by global standards, analysts say a successful bid could put CNPC in prime position to win bigger fields.

Mr. Jumriany said Afghanistan's government is planning to conduct seismic surveys before tendering blocks in the Afghan Tajik Basin, which he said is estimated to hold some 1.8 billion barrels of oil.

China has long cultivated oil and gas ties with Central Asia. In recent years the completion of two major Chinese pipelines into Turkmenistan and Kazakhstan has allowed China to further tap the region's hydrocarbons.



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