ISLAMABAD

The interim Afghan Taliban government has signed a 25-year contract with a Chinese company for the extraction of oil from Afghanistan’s Amu River basin and to develop an oil reserve in the country's north.

The first major foreign investment deal since the Taliban seized power in Kabul in 2021 was signed on Thursday by acting Minister of Mines and Petroleum Sheikh Shahabuddin Delawar and an official of Xinjiang Central Asia Oil and Gas Company in a ceremony held at the capital Kabul.

Acting Deputy Prime Minister Mullah Abdul Ghani Baradar Akhund and Chinese Ambassador to Afghanistan Wang Yu also witnessed the signing ceremony.

“Recently, several projects were approved by the Economic Commission, and with their undertaking, fundamental steps will be taken for the prosperity of the country and public welfare,” state-run Bakhtar News Agency quoted Baradar as saying.

“We request that the company continue the procedure in accordance with international standards and in the best interests of the people of Sar-e Pul (northern province in Afghanistan),” he added.

Speaking on the occasion, Sheikh Shahabuddin Delawar said under the deal the Chinese company will be extracting oil from an area covering 4,500 square kilometers (1,737 square miles) collectively in northern Sar-e-Pul, Jawzjan, and Faryab provinces.

“Over 3,000 local people will get jobs in this project,” he said.

Delawar said 200 tons of oil would be extracted initially daily and the quantity would gradually increase to 1,000 tons a day.

Speaking on the occasion, the Chinese envoy called the deal important for the economic growth of the war-torn country and a positive step towards close relations between Kabul and Beijing.

According to the contract, the Chinese company will invest $150 million in the first year which will increase to $540 million in three years.

Afghanistan is estimated to be sitting on untapped resources of more than $1 trillion, which has attracted the interest of some foreign investors, according to Bakhtar News Agency.