ATLANTA (Pajhwok): The acting minister of mines and petroleum says a Chinese company will drill 10 new oil wells in Amu River basin and make six more wells ready for petroleum extraction.
The state owned Bakhtar News Agency (BNA) reported Shiekh Shahabudin Dilawar made the announcement in the capital of northern Jawzjan province.
Speaking at the inaugural ceremony for the Shiberghan-Mazar-i-Sharif gas pipeline project, he said a contract for the development of oilfields in the Amu Darya basin had already been inked with the Chinese company.
He told journalists the contract inked by the previous government with the Chinese company had been canceled after the Islamic Emirate’s takeover.
The deal has now been renewed broadly under the same conditions, but with the addition of some new clauses, according to the minister.
Dilawar explained the revised accord, the contract would be terminated if the company halted the work for a period of two months without any valid reason.
Crude oil will be processed in Afghanistan and first year of the contract will be on a trial basis. The contractor will have to invest an additional $148 million as well.
Dilawar added, the company must drill ten new oil wells in the river basin and make six more wells ready for extraction.
One of the oil wells, which was inaugurated two days ago, has the capacity of 100 tonnes of oil extraction on a daily basis.
The remaining 16 wells would be made ready for oil extraction until the beginning of the new Gregorian year, he informed.
The contract for oil extraction from Amu basin was singed between the MoMP and AfgChin Company on January 5 this year for a period of 25 year.
Under the agreement, the government of Afghanistan will invest 20 percent of the capital. The Chinese firm will invest 80 percent of the money needed.
The first three years will be an exploring period for the company, which must dig up nine wells over 300 square kilometres of land.
The area covers over 4,500 square kilometres of land in Sar-i-Pul, Jawzajn and Faryab provinces. The rent of one square hectare of land assigned one dollar per year. In areas where oil wells are located, the rent of each hectare will increase to up to 40 dollars a hectare.
Currently, 400 tonnes of crude oil is extracted from seven wells in the country. Fifteen percent of royalty goes to the Ministry of Mines and Petroleum.
aw/mud
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