The Taliban-led administration in Afghanistan signed its first international contract to extract oil from the northern Amu Darya basin, Bloomberg reported. The agreement has been signed with a subsidiary of China National Petroleum Corporation.
It was inked in Kabul in the presence of Chinese ambassador to Afghanistan, Wang Yu, and the Taliban’s deputy prime minister for economic affairs Mullah Abdul Ghani Baradar, the report said.
The pact will “strengthen Afghanistan’s economy and increase its level of oil independence,” Abdul Ghani Baradar said. Wang Yu said the 25-year contract will support Afghanistan’s push for self-sufficiency.
According to the contract, Xinjiang Central Asia Petroleum and Gas Co. will invest as much as $150 million in the first year and $540 million over the next three years to explore five oil and gas blocks, said Shahabuddin Delawar, acting minister of mines and petroleum.
Through the deal, Taliban will earn 15% royalty fees and daily oil production will start at 200 tons and gradually rise to 1,000 tons. The company will also build Afghanistan’s first crude oil refinery but if it fails to meet all the contract obligations within a year, the contract would be terminated.
This comes as Taliban seek investments to fix Afghanistan’s economy which nearly collapsed after international aid which accounted for 40% of the nation’s gross domestic product, was halted following the withdrawal of US troops in 2021. The Taliban have repeatedly asked international companies to invest in Afghanistan, even though it has drawn widespread international condemnation for its rules barring women from education and jobs.