The Taliban-led administration on Thursday signed a contract with a Chinese company to extract oil from the Amu Darya River basin in northern Afghanistan.
The contract was signed with Xinjiang Central Asia Petroleum and Gas Co (CAPEIC) and is the first major agreement between the Taliban and a foreign company since the group took control of Afghanistan in August 2021.
The move also underscores China’s economic involvement in the country despite a recent attack by Daesh on Chinese nationals at a hotel in Kabul.
“The Amu Darya oil contract is an important project between China and Afghanistan,” China’s ambassador, Wang Yu, said at a news conference.
Under the terms of the agreement, the Chinese company will invest $150 million a year in Afghanistan, Taliban spokesperson Zabihullah Mujahid said on Twitter.
He said the investment would increase to $540 million in three years and that the contract is valid for 25 years. According to Mujahid, the Taliban will have a 20% stake in the project, which will eventually increase to 75%.
No country, including China, has officially recognized the Taliban as Afghanistan’s legitimate government.
In 2012, China’s state-owned company National Petroleum Corp (CNPC) signed a contract with the previous government in Afghanistan to extract oil in the Amu Darya basin in the northern provinces of Faryab and Sar-e Pul.
At the time, it was estimated that there was up to 87-million barrels of crude oil in Amu Darya.
Baradar meanwhile said on Thursday another Chinese company, which he did not name, had stopped extracting oil after the fall of the previous government. Because of this, the new deal was struck, he said.
Over the years, experts in the oil and mineral industries have said Afghanistan is likely sitting on more than $1 trillion of untapped resources that includes oil, gas and other minerals.