China and Afghanistan signed a 25-year contract on Jan. 5, for Chinese oil exploration and refinery development in the Amu Darya Basin in northern Afghanistan. The Xinjiang Central Asia Petroleum and Gas Co. (CAPEIC) is to invest up to $150 million in the first year, and then $540 million over the next three years, for exploration, and for refining capacity to be built to serve Afghanistan’s needs.
This marks a milestone in the Islamic Emirate of Afghanistan’s stated intent to move toward national economic self-sufficiency, despite the current desperate conditions, sanctions, and lack of recognition. The oil development deal was signed in person in Kabul in the presence of the Chinese Ambassador to Afghanistan, Wang Yu, and IEA Deputy Prime Minister for Economic Affairs Mullah Abdul Ghani Baradar.
Baradar stated that the deal will “strengthen Afghanistan’s economy and increase its level of oil independence,” according to reports in oil media, which see daily oil production starting at 200 tons, then rising to 1,000 tons from this project.
