The Taliban regime in Afghanistan has signed an oil extraction agreement with China’s Xinjiang Central Asia Petroleum and Gas Co. (CAPEIC) in Afghanistan’s first major foreign deal since the Taliban seized control in 2021.
Under the contract, the CAPEIC will invest $150 million in one year and $540 million in the next three years for oil extraction in Afghanistan’s Amu Darya Basin, Taliban spokesman Zabihullah Mujahid said.
Zabihullah said they'll extract oil from an area covering 4,500 square kilometers (1,737 square miles) in Sar-e Pul, Jawzjan, and Faryab provinces, with the daily extraction rate increasing gradually to 2,000 tons from 1,000 tons.
The contract has a 25-year term and will automatically be terminated if CAPEIC fails to meet its material obligations within a year, he noted.
It’s located mainly in Turkmenistan and Uzbekistan, as well as in parts of northern Afghanistan and northeastern Iran.
No country has recognized the Taliban as Afghanistan’s legitimate government since it took power in 2021. However, the Chinese Communist Party (CCP) continues to engage with the Taliban for economic interests.
Afghanistan is estimated to be sitting on untapped natural resources of more than $1 trillion, which has attracted the interest of some foreign investors, although decades of turmoil have prevented any significant exploitation.
In 2012, the state-owned China National Petroleum Corp. signed a contract with the former U.S.-backed administration in Afghanistan to extract oil at the Amu Darya. The Amu Darya was estimated to have 87 million barrels of crude at the time.
‘Exaggerated the Threat’
The CCP allowed the Taliban to keep Afghanistan’s embassy in Beijing and offered humanitarian aid to Afghanistan, without formal recognition of the regime. Analysts believe that security is another factor driving the CCP’s support for the Taliban.“The primary security concern of China is potential threats from the relatively small East Turkistan Islamic Movement, a group that seeks to liberate Xinjiang province and the Uyghur people from Chinese government control,” she said.
“China aims to ensure that the Taliban are willing to eliminate Uyghur militant groups operating inside of Afghan territory. It is important to stress that China has exaggerated the threat and involvement of Uyghurs in terrorist organizations.”
“Although both parties hinted that there will be significant future investment by China in Afghanistan, few details have emerged,” the report reads. “This is because, without security, it is simply impossible for China to secure its own people working in the country.”
