Chinese Firm Signs $540 Million Oil-and-Gas Deal in Afghanistan
Wall Street JournalNov 26, 2022
Afghanistan, Chinese Company Sign Oil Extraction Deal
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Image copyright: AFP/Getty Images [via The Wall Street Journal]
The Facts
On Thursday, the Taliban government signed an agreement with Chinese company Xinjiang Central Asia Petroleum and Gas Co. Ltd. (CAPEIC) to develop an oil-and-gas field in the Amu Darya basin in northern Afghanistan over the next three years.
The Taliban's acting Minister of Mines and Petroleum, Shahabuddin Delawar, said the oil extraction project covering a 4.5K-square-kilometer region will create 3K jobs for Afghans as CAPEIC has agreed to process the oil in Afghanistan rather than ship it overseas.
The Spin
Pro-establishment narrative
This deal is almost a mirror image of the one signed in 2011, which fades into memory due to both security problems involving terrorist insurgents and logistical issues. As the Taliban still hasn't proved it can contain terrorist attacks nor that it can successfully drill its resource-rich land, excitement over this deal should be quelled until it's proven plausible.
Establishment-critical narrative
This oil extraction contract is crucial for the economic growth and self-sufficiency of Afghanistan, which is estimated to be sitting on unexploited resources worth more than $1T with the potential to create thousands of jobs and promote development. Following international standards, this deal also illustrates the growing interaction between Beijing and Kabul.
