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IEA signs Amu River basin oil extraction contract with Chinese company

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(Last Updated On: January 5, 2023)

Islamic Emirate of Afghanistan’s (IEA) officials signed a contract on Thursday with China’s CAPEIC (Xinjiang Central Asia Petroleum and Gas Co) Company for the extraction of oil in the Amu River basin, which covers a large area across parts of three northern provinces.

The signing ceremony was held at the Government Information and Media Center (GMIC) in Kabul, in the presence of Mullah Abdul Ghani Baradar Akhund, the Economic Deputy of the Prime Minister, and China’s ambassador to Kabul.

Speaking at the event, Sheikh Shahabuddin Delawar, the Minister of Mines and Petroleum, said: “According to the order of the Supreme Leader and the guidance of the Prime Minister and the Economic Deputy of the Ministry, today we will sign an oil extraction contract with a Chinese company.”

The ministry said oil will be extracted from an area covering 4,500 square kilometers across parts of Sar-e-Pul, Jawzjan and Faryab provinces.

Delawar said the rate of oil extraction will be from 1,000 to 23,000 tons per day and the company will invest up to $150 million dollars a year, which will increase to $540 million dollars in three years.

According to the contract, the Islamic Emirate will own a 20 percent share in the oil fields, but that in time this percentage will increase to 75 percent.

Delawar also said that 3,000 jobs will be created for Afghans. However, if skilled labor is not available in Afghanistan, then China will be able to import workers, he added.

He also said that it was agreed that if the Chinese company does not fulfill all its requirements within a year, the contract will automatically be canceled.

Mullah Abdul Ghani Baradar Akhund also spoke at the event and said that in the past year, work has been done to promote development in the country.

“Recently, several projects were approved by the Economic Commission, and with their implementation, fundamental steps will be taken regarding the prosperity of the country and public welfare,” Baradar said.

He said the signing of Thursday’s contract was an important step towards the country obtaining self-sufficiency. He also called on the Chinese company to work in accordance with international standards and to provide local people with public benefits.

Baradar also told the ministry of mines to closely monitor developments at the oil field so as to ensure the Chinese company fulfills its obligations.

China’s Ambassador to Afghanistan Wang Yu meanwhile said: “This contract is important for the economic growth and self-sufficiency of Afghanistan and is a good example of cooperation and interaction between the two countries.”

Wang asked the contracting company to carefully perform the assigned tasks according to the provisions of the contract and also asked the ministry to provide the framework for the effective implementation of the contract and to work closely with the contracting company.

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Turkmenistan business delegation visits Herat

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(Last Updated On: May 5, 2024)

Nokerguly Atagulyev, the head of the Union of Industrialists and Entrepreneurs of Turkmenistan, has visited Herat province for trade talks, the Ministry of Industry and Commerce announced on Saturday.

The ministry said in a statement that the purpose of the Turkmen delegation’s visit is to help reduce Afghanistan’s trade deficit, to foster commercial and economic cooperation, examine Afghanistan’s proposal for the supply of construction materials, especially marble and iron bars and for the growth of trade and transit between the two countries.

The delegation is also expected to meet with officials and private sector representatives, and visit commercial and industrial sites of Afghanistan, especially in Herat province.

The visit comes after Nooruddin Azizi, Acting Minister of Industry and Commerce’s trip to Turkmenistan. The aim is to open the first Afghan-Turkmen Business Forum and discuss the import of construction materials, especially marble and iron bars from Afghanistan.

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IEA plans regional energy trade hub with Russian oil in mind

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(Last Updated On: May 3, 2024)

The Islamic Emirate of Afghanistan (IEA) has agreed with Kazakhstan and Turkmenistan to build a logistics hub in western Afghanistan aimed at making the war-torn nation a major logistics point for regional exports, including oil from Russia to South Asia, the country’s commerce minister said.

Following a meeting between representatives of the three countries in the Afghan capital last week, IEA’s acting commerce minister Nooruddin Azizi told Reuters that technical teams would draw up a written agreement within two months on the formal plans for the hub, which all three countries would invest in after six months of talks.

As foreign aid to Afghanistan falls and the predominantly agricultural economy is marred by persistent drought, its officially unrecognised IEA government has faced questions over how to fund development and avoid economic stagnation, Reuters reported.

Azizi said the new hub was part of broader efforts to take advantage of Afghanistan’s strategic location, once a thoroughfare for the ancient Silk Road trade route, lying between South and Central Asia and sharing borders with China and Iran.

“Based on our discussions, a logistics centre is going to be established in Herat province, which can connect the north to South Asia,” Azizi said, adding that the Taliban (IEA) was eyeing the millions of tons of oil they expected Russia would be selling in coming years to South Asian countries, particularly Pakistan, to pass through the new hub.

“The three countries have done their best to prove Afghanistan’s claim as a connectivity point,” he said.

“Reaching Pakistan through Afghanistan will be the best option,” Azizi added, saying they were focused on Russia’s petroleum exports and that Kazakhstan was also planning to export goods through Herat into South Asian markets.

Kazakhstan’s trade ministry said in a statement to Reuters that it wanted to develop roads and a railway through Afghanistan to connect with South Asia and the Gulf, with the hub serving as an important logistics point.

“The creation of the hub will allow for the development of multi-modal services by consolidating truck shipments in the dry port where they will be sorted and sent along railroads on the North-South corridor to sea ports in the Gulf, Pakistan, and Indian Ocean, towards India,” the statement said.

Azizi said the logistics hub’s initial capacity would be one million tons of oil but he did not give a date for when it would be operational.

Turkmenistan’s government did not immediately respond to a request for comment and the Russian government did not respond to a request for comment during a national holiday.

Pakistan’s foreign office and energy minister did not respond to a request for comment. Pakistan is a major trading partner with Afghanistan and has signed on to regional energy connectivity agreements, Reuters reported.

However, Islamabad has had strained relations with the IEA in recent years over accusations Afghanistan is harbouring anti-Pakistan militants, which Kabul denies.

Cash-strapped Pakistan last year became Russia’s latest customer, snapping up discounted crude that has been banned from European markets due to Russia’s war on Ukraine.

Afghanistan also buys oil, gas and wheat from Russia at discounted rates.

Azizi said that the IEA was also speaking with Chinese authorities on building a road through the remote, narrow Wakhan corridor that connects Afghanistan with China and that they hoped Afghanistan would eventually develop into a route for trade between China and Iran. He said Afghan commerce ministry officials had been recently been sent to China for training.

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Aziz discusses trade issues while on visit to Iran

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(Last Updated On: May 2, 2024)

Acting Minister of Commerce and Industry of the Islamic Emirate of Afghanistan Nooruddin Azizi arrived in Iran’s Sistan and Baluchistan Province on Thursday for a meeting on facilitating the process of economic cooperation between the two countries.

The ministry’s spokesman Abdulsalam Javadakhandzadaa said Thursday the minister discussed the development of trade and transit relations between Iran and Afghanistan – but with the focus on the province of Sistan and Baluchistan.

Aziz also discussed the need to strengthen processes for goods through Chabahar port and emphasized the need to resolve issues relating to this trade route.

According to Javadakhandzadaa officials of the two countries discussed the strengthening of commercial and economic cooperation, while Azizi requested that costs be lowered for goods and for land to be made available in Chabahar to Afghan businessmen and for railway facilities to be provided.

Both sides agreed that in order to develop trade between the two countries and to strengthen transit through Chabahar, a joint technical committee would be established on a provincial level and that issues will be followed up by the central committee.

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