Afghanistan’s Taliban administration on Thursday signed a 25-year memorandum of understanding (MoU) with a state-backed Chinese company to extract oil from the country’s Amu Darya basin, according to the movement's chief spokesperson Zabihullah Mujahid.
The MoU between the Taliban and Xinjiang Central Asia Petroleum and Gas Company (CAPEIC) was announced at a press conference in Kabul, attended by senior Taliban officials and Wang Yu, Chinese Ambassador to Afghanistan.
Mujahid said that the Chinese company would invest $150 million an year in the project. The Chinese investment in the project would increase to $540 million in three years, he said.
The Taliban spokesperson said that the interim Afghan government would hold a 20 percent stake in the project, which could be increased to 75 percent.
The Taliban has said that the project would enable Afghanistan to become “self-sufficient” in energy needs and pave the way for export of crude from the country in three years.
Around 3,000 Afghans will be provided employment in the oil extraction project, as per Kabul.
The Chinese Ambassador to Kabul said at the press conference that the project was an “important” one for both the countries.
As per estimates by previous Afghan governments, the central Asian country has vast untapped reserves of not only oil and natural gas, but also copper, gold, iron ore, lithium and rare earth minerals.
The Amu Darya Basin reportedly has reserves of 87 million barrels of oil.
While Beijing is yet to formally recognize the Taliban government, it has expressed its intention to extend the China-Pakistan Economic Corridor (CPEC) into Afghanistan.
The CPEC is a series of connectivity and infrastructure projects connecting China’s Xinjiang Autonomous Region to the Pakistani port of Gwadar, located at the Arabian Sea.
The CPEC has been described as a flagship initiative of Beijing’s Belt and Road Initiative (BRI), which seeks to economically integrate countries in Asia, Africa, Europe and the Americas.
*The Taliban is under UN sanctions for terrorism.