Islamabad —
Afghanistan’s ruling Taliban on Thursday signed their first international deal with a Chinese oil company to explore and develop oil reserves in the north of the country.
Senior Taliban officials and China’s ambassador to Kabul, Wang Yu, witnessed the televised signing ceremony in the Afghan capital, which marked the first major foreign investment deal in Afghanistan since the Islamist group seized power in August 2021.
Taliban Mines Minister Shahabuddin Dilawar said at the event the deal with Xinjiang Central Asia Petroleum and Gas Co (CAPEIC) would bring in US$150 million a year in Chinese investment for oil exploration in the Amu River basin.
The deal covers an area of 4,500 square kilometers in the northern provinces of Saripol, Jowzjan and Faryab and creates job opportunities for around 3,000 Afghans, he said.
Dilawar explained that the Chinese investment is expected to increase to US$540 million in three years for the 25-year contract. He added that the Taliban government will have a 20 percent stake in the project with a stipulation to increase it to 75 percent.
The Chinese ambassador hailed the “successful” signing ceremony, calling it a good start in promoting bilateral relations between Beijing and Kabul.
“The Amudarya [River] Oil project is an important project of practical cooperation between China and Afghanistan,” Wang said.
“The progress of this project has set a model for China-Afghanistan cooperation on major projects in energy and other fields,” he said.
Wang urged the Chinese company to “comply strictly with the laws of Afghanistan” while fulfilling its responsibilities and obligations under the treaty.
“At the same time, I also believe and hope that the Afghan side will take practical and effective measures to ensure the smooth and safe operation of the project … to increase confidence for more foreign investors in the development of their business and Afghanistan.”
China’s state-owned National Petroleum Corp signed a similar deal with the US-backed former Afghan government for oil exploration in the Amu Darya Basin.
Dilawar claimed the previous contract could not be executed because he had “a lot of problems”. He did not explain, saying his government rewrote the document to address the issues and it resigned with CAPEIC on Thursday.
The Taliban minister said the crude oil under the deal would be processed in Afghanistan and suggested the Chinese company would build a refinery in the country.
Afghanistan’s untapped resources are valued at more than $1 trillion. Foreign investors have shown interest in exploring them, but decades of conflict in the South Asian nation have discouraged such initiatives.
Violence has abated significantly since the Taliban took over the country 16 months ago, when the then internationally-backed government in Kabul collapsed and all US-led international forces withdrew from the country after nearly 20 years of war.
But the world community has yet to give the Taliban government legitimacy over human rights concerns, particularly its restrictions on Afghan women’s access to jobs and education.
China has also not officially recognized the Taliban, but it has promised to support the Islamist rulers and work with them in Afghanistan’s economic development.
“[China] respects the Afghan people’s decision for independence and respects the religious beliefs and national customs of Afghanistan,” Wang noted in his speech on Thursday. “China has never interfered in Afghanistan’s internal affairs, never seeks self-interest for the so-called spheres of influence in Afghanistan.
While China, Pakistan, Russia, Iran, Turkey and several other regional countries kept their embassies open in Kabul following the Taliban takeover, Washington and Western nations at large quickly moved their Afghan diplomatic missions to Doha, Qatar.