The Taliban government in Afghanistan signed its first international contract to drill for oil in the Amu Darya basin in the north of the country. According to a tweet from Taliban spokesman Zabihullah Mujahid, the 25 year agreement was signed with Xinjiang Central Asia Oil and Gas Company, a subsidiary of state-owned China National Petroleum Corporation.

Today, the oil exploration contract in the Amu Darya Basin was signed with a Chinese company. According to the contract, oil will be extracted from 4500 square kilometers in the three northern provinces, Salpur, Chozjan and Faryab. The daily mining volume will increase from 1000 tons to 20000 tons, Mr. Mujahid said. This transaction is the first major energy exploitation agreement with a foreign company since the Taliban took control of Afghanistan in 2021.

The Amu Darya River oil contract is an important project between China and Afghanistan. According to Wang Yu, the Chinese ambassador to Afghanistan, the contract was signed in the presence of the Chinese. The Taliban Deputy Prime Minister in charge of economic affairs, Abdul Ghani Barada, also attended the signing ceremony. He said that the agreement would strengthen Afghanistan's economy and improve its oil independence.

It is estimated that Afghanistan is home to natural resources, including natural gas, copper and rare earths, worth more than US $1 trillion. However, due to decades of turbulence in the country, most of these reserves remain untapped. Mujahid said on Twitter that according to the contract, the Chinese company will invest 150 million dollars in Afghanistan every year, and the investment will increase to 540 million dollars three years later.

The Taliban government will establish a 20% partnership in the project, which can be increased to 75%. The Taliban will also receive a 15 per cent royalty from the 25 year contract.

The Taliban believe that the restart of the project is significant because so far, the investment has come from private or individual entrepreneurs, said Rafael Pantucci, senior associate researcher of the Royal United Services Institute. A Chinese state-owned enterprise is also negotiating the operation of a copper mine in the east of the country.Editor/Xing Wentao