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.