Afghanistan terminates Amu oil contract with Chinese firm

KABUL (Pajhwok): The Ministry of Mines and Petroleum has terminated its 25-year oil exploration and extraction contract with China’s CAPEIC in the Amu River basin due to repeated contractual violations.

The Amu River basin, one of Afghanistan’s six major oil fields, spans the northern provinces of Faryab, Sar-i-Pul, and Jawzjan. It was discovered nearly 84 years ago by Swedish experts and is estimated to contain 80 million barrels of oil.

In 2010, the former government awarded an oil extraction contract for the field to China National Petroleum Corporation (CNPC) in partnership with Watan Group. However, progress stalled due to various challenges.

A new 25-year contract was signed in January 2023 with China Xinjiang Central Asia Petroleum and Gas Co. (CAPEIC), but the company reportedly failed to uphold its commitments.

Hamayon Afghan, spokesman for MoMP, stated on X that CAPEIC repeatedly breached contractual terms. Joint committees from relevant ministries confirmed the violations after thorough investigations.

The termination followed a directive from the Office of the Deputy Prime Minister for Economic Affairs.

The ministry is currently seeking reputable international consultancy firms to submit Expressions of Interest (EoIs) for a legal review of the contract, technical site assessments, and financial reconciliation with CAPEIC.

kk/sa