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Taliban Signs $540 Million Oil Deal With China

New 25-year cooperation arrangement will give Taliban up to a 75% share

The Taliban has signed a deal with China to extract oil from the Amu Darya basin, marking the first international deal of its kind reached since the Taliban took over control of Afghanistan after the U.S. withdrew in 2021.

Senior members of the Islamic Emirate and China’s ambassador signed the contract during a televised ceremony on Jan. 5, according to Afghanistan’s 24-hour news network TOLOnews.

Under the deal, “Xinjiang Central Asia Petroleum and Gas Co (CAPEIC) will invest $150 million a year in Afghanistan, increasing to $540 million in three years for the 25-year contract,” as reported by The Diplomat.

“The Amu Darya oil project is an important project of practical cooperation between China and Afghanistan,” The Diplomat quoted Chinese Ambassador to Afghanistan Wang Yu as saying.

Afghanistan holds a 20 percent share of the deal, in addition to a 15 percent royalty, according to a post on Twitter from Taliban spokesperson Zabihullah Mujahid.

He added that under an additional part of the deal, Afghanistan will “share up to 75 percent.”

Afghanistan’s untapped resources hold an estimated worth of more than $1 trillion, and VOA News has reported that a Chinese company will build a refinery in Afghanistan where the crude oil will be refined.

During the ceremony, acting minister of mines and petroleum, Shahabuddin Delawar said that if the company did not deliver on its obligation, the contract will be null and void.

“Both sides should work together and cooperate closely to beaut the project into a successful model of China-Afghanistan cooperation,” TOLOnews quoted Yu as saying. “So it has confidence for more foreign investors to develop their business in Afghanistan. China and Afghanistan are linked by mountains and water and share the same fate.”

In 2012, China’s state-owned National Petroleum Group signed a contract with Afghanistan’s previous government to extract oil from the same basin. According to the Straits Times, Acting Deputy Prime Minister Mullah Baradar told reporters that another Chinese company discontinued extraction after the fall of the government.

“We ask the company to continue the procedure according to international standards. Also, we ask them to provide for the interest of the people of Sar-e Pul,” he is quoted as saying.

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