China is exploring oil and gas reserves in Tajikistan

Representatives of the China National Petroleum Corporation (CNPC) hope to find a large volume of oil and gas reserves in the southwest of Tajikistan “in the very near future.” This was stated by the General Director of CNPC for Central Asia (CNPC CA) Bien Dedzhi at the ceremony for the launch of the project to develop new fields in southwestern Tajikistan (the Bokhtar project), which took place the day before, on April 11, in the city of Sarband.

He noted that the corporation, together with other companies and relevant state structures of Tajikistan, has been conducting certain work for many years, and “despite numerous difficulties, we have been able to advance the Bokhtar project to a new stage of development.” The head of CNPC CA emphasized that oil and gas are necessary for the further development of Tajikistan’s economy. “CNPC is ready to assist Tajikistan in achieving self-sufficiency in hydrocarbons and to make a significant contribution to the socio-economic development of the country,” he added.

“We have all been waiting for this for a long time, and soon large-scale work in the oil and gas sector will begin in our country,” said Deputy Minister of Energy and Water Resources of Tajikistan Sharifa Khudobakhsh. She noted the need to “achieve the goal” in the designated hydrocarbon area assigned to the corporation. During the event, it was noted that geological exploration work will first be conducted over an area of 15.3 square kilometers. It is expected that 25 highly qualified Chinese technical specialists and 190 citizens of Tajikistan, as well as nearly a hundred units of high-precision technology, will be involved in this work.

At the end of March this year, the lower house of the Parliament of Tajikistan ratified an Additional Agreement between the government of the country, CNPC Central Asia B.V., and Total E&P Tajikistan B.V. This document provides for the transfer of the French oil and gas company Total’s share in the Bokhtar project to the Chinese corporation CNPC. The production sharing agreement concluded in 2008 with Kulob Petroleum Limited “should further be read and interpreted as a production sharing agreement concluded between the Government of the RT and CNPC.” Under the name Kulob Petroleum Limited, a company that was a subsidiary of the Canadian oil and gas corporation Tethys Petroleum Limited operated in the republic, which exited the project in 2017.

The initial agreement, as previously mentioned, was signed by the government of Tajikistan with the Canadian company Tethys Petroleum on June 13, 2008. In late 2011, Tethys reported the discovery of “supergiant” oil and gas reserves at the Bishinchak field. The company’s specialists estimated these resources, excluding risk factors, at 27.5 billion barrels of oil equivalent, with 69% attributed to gas and 31% to oil and gas condensate. Following this, the country’s leadership stated that Tajikistan would be able to ensure its own natural gas supply in the coming years. Major global companies such as Total (France) and CNPC (China) began to show interest in Tajikistan’s hydrocarbon reserves. In July 2013, Tethys, Total, and CNPC signed an agreement to provide a stake in the project. As a result, each party acquired one-third of the share in the Bokhtar Production Sharing Agreement. According to the agreement, the government of Tajikistan is not a participant in the development and extraction and does not invest funds in this work. However, in the event of the discovery of fields and the extraction of oil and gas, it can take 30% of the production in kind or in total.

In September 2015, CNPC and Total demanded that Tethys Petroleum withdraw from the project. This ultimatum towards Tethys was issued due to the company’s failure to meet its obligations and debts related to the project. The matter escalated to legal proceedings, and in 2017, the International Arbitration Court recognized the claims of Total and CNPC as justified. In its last statement in early 2018, Tethys announced that it had decided to exit the project due to high risks and significant costs required to continue operations. Thus, after Total’s exit from the agreement, CNPC remains the sole participant.