Tajikistan invites CNPC to explore for oil and gas

Tue Jun 5, 2012 12:44pm EDT

* Agreement signed during president's visit to China
    * Deals seen giving Tajikistan more leverage with Russia
    * Zijin Mining invited to expand gold output

    By Roman Kozhevnikov	
    DUSHANBE, June 5 (Reuters) - China National Petroleum Corp
(CNPC) could begin exploring for oil and gas in Tajikistan after
signing a deal on Tuesday that would expand Beijing's influence
in the impoverished former Soviet republic. 	
    Tajik President Imomali Rakhmon, in China for a meeting of
the Shanghai Cooperation Organisation security forum, also
secured a $50 million Chinese loan toward a road project and
invited Zijin Mining Group Co Ltd to explore for
copper.	
    "Tajikistan is interested in establishing cooperation with
CNPC and is prepared to create all the conditions needed for its
successful work on the republic's territory," Rakhmon was quoted
as saying by the official presidential press service. 	
     Tajikistan, a mainly Muslim country of 7.5 million people,
is the poorest of 15 former Soviet states. Its economy relies
heavily on cotton and aluminium exports, as well as remittances
from nearly 1 million migrant workers.	
    Most of the workers live in Russia, which sees the former
Soviet region immediately north of Afghanistan in its sphere of
influence.	
    Russian gas monopoly Gazprom OAO is one of two
foreign firms currently drilling for gas in the country.	
    The other is Toronto- and London-listed Tethys Petroleum Ltd
 .	
    Independent analyst Jamshed Kadyrov said China's financial
muscle and thirst for natural resources would challenge Russia's
traditional dominance in the region, giving veteran leader
Rakhmon more leverage in dealings with the Kremlin.	
    Tajikistan, which experiences frequent power blackouts and
relies entirely on neighboring Uzbekistan for its natural gas,
did not disclose any details of the memorandum of cooperation
with CNPC, beyond Rakhmon's invitation to explore for deposits.	
    "It's entirely possible that, should the Russian and
Canadian companies have no success, the right to develop
gas-bearing deposits could pass to the Chinese," Kadyrov said.	
    In a statement on its website, www.cnpc.com.cn, CNPC said
Chairman Jiang Jiemin hosted Rakhmon at company headquarters and
discussed "strengthening cooperation in the oil and gas
businesses".	
    	
    MINING EXPANSION	
    China's expansion into Tajikistan -- they share a
mountainous 800-km (500-mile) border -- mirrors its worldwide
search for natural resources to feed its fast-growing economy.	
    Chinese money and engineers have built a pipeline to carry
gas from Turkmenistan through Central Asia to its western
border, and Chinese companies control nearly one-quarter of oil
production in Kazakhstan, the largest ex-Soviet oil producer
after Russia. 	
    In a statement, Rakhmon's press service said the
Export-Import Bank of China had supplied a $50.5 million loan
toward the reconstruction of a road through the Pamir mountains
linking the two countries.	
    Tajikistan's debt to the bank totaled $878.5 million at the
beginning of this year, or more than 41 percent of the country's
total external debt.	
    Rakhmon's press service also said the Tajik president, in
power since 1992, invited Zijin Mining Group to develop a
sulphide ore deposit in the north of the country with a view to
building a copper plant.	
    Zijin Mining already owns 75 percent of the Zeravshan gold
mine, which last year produced 1.3 tonnes of gold, or nearly 60
percent of Tajikistan's total gold production.	
    "In the next few years, annual gold production volumes at
Zeravshan should reach 5 tonnes," the president's press service
said.
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