Afghanistan signs oil extraction deal with Chinese company

 A Chinese company has been contracted by the Taliban-led government of Afghanistan to extract oil from the A-M U Darya basin and develop an oil reserve in the northern S-A R-E P U L province.

The contract, which was signed on Thursday by acting Minister of Mines and Petroleum Sheikh Shah A-B U D-I N D-E L-A W-A R and a representative of Xinjiang Central Asia Petroleum and Gas Co. (C-A P-E I-C) at a ceremony in Kabul's capital, was the first significant agreement for the extraction of public goods that the Taliban administration has made with a foreign company since it took power in 2021.

The signing was also witnessed by Acting Deputy Prime Minister Mullah Abdul Ghani Baradar and Chinese Ambassador Wang Y U, according to the state-run B-A K H T-A R News Agency.

The Economic Commission recently approved a number of projects, and with their implementation, fundamental steps will be taken for the country's prosperity and public welfare, according to the agency.

He concluded by saying, "We request that the company continue the procedure in accordance with international standards and in the best interests of the people of S-A R-E P U L."

D-E L-A W-A R stated at the event that as part of the agreement, the Chinese company will extract oil from a collective 4,500 square kilometers (1,737 square miles) in the northern provinces of S-A R-E P U L, J-A W Z J-A N, and F-A R Y-A B.

He stated, "Over 3,000 locals will get jobs in this project". 

The deal, according to the Chinese envoy, is important for the war-ravaged nation's economic growth and a step toward closer ties between Kabul and Beijing

Wang Y U stated, "The A-M U Darya oil contract is a significant project between China and Afghanistan."

Z-A B-I H U L-A M U H-A H-I D, a Twitter spokesperson for the administration led by the Taliban, stated that the contract stipulates that C-A P-E I-C will invest $150 million annually in Afghanistan.

He stated that for the 25-year contract, its investment would rise to $540 million in three years.

He added that the Taliban-run government will have a 20% stake in the project, which could be increased to 75%. In 2012, the state-owned China National Petroleum Corp. (C N P C) signed a contract with the previous government of Afghanistan, which was supported by the United States, to extract oil from the Amu Darya basin in the northern provinces of F-A R Y-A B and S-A R-E P U L. 

Amu Darya was thought to contain up to 87 million barrels of crude at the time. According to D-E L-A W-A R, the oil had to be processed in Afghanistan as part of the agreement.

At the news conference on Thursday, Baradar said that the deal had been made with C-A P-E I-C because another Chinese company, which he didn't name, stopped extracting after the previous government fell.

Despite decades of turmoil preventing any significant exploitation, some foreign investors have expressed interest in Afghanistan's estimated $1 trillion worth of untapped resources.

Another deal that was first signed under the previous government is currently being discussed with the Taliban-led administration regarding the operation of a copper mine in eastern L O G-A R province by a Chinese state-owned company.

Although China does not officially recognize the Taliban administration, the country is important to the Belt and Road infrastructure initiative and holds significant stakes in the region.

Even though the I-S I-L (ISIS) group has targeted Afghan citizens, the oil contract also demonstrates China's economic involvement in the region.

The announcement came a day after the Taliban administration said that its forces had killed eight I-S I-L members in raids. Some of the ISIL members were behind an attack on a Kabul hotel that served Chinese businessmen last month