When the Taliban retook control over Afghanistan four years ago, China was quick to sign an oil field development deal to extract crude in the central Asian country and boost its footprint and influence there.
But the oil deal, signed in 2023 by the Taliban and China’s Xinjiang Central Asia Petroleum and Gas Co., Ltd (CAPEIC) and planned to last for 25 years, has now collapsed, with each side accusing the other of breaching the contract.
In early 2023, the Taliban signed the 25-year deal with CAPEIC for the Amu Darya oil project. Under the terms of the deal, CAPEIC was set to invest $540 million per year in the first three years.
The Amu Darya oil project encompasses a 4,500 square kilometer area that will be explored by 2026, during which between 1,000 and 20,000 tons of oil will be extracted, the Taliban’s Acting Minister of Minerals and Petroleum Shahabuddin Dilawar said at the time.
But disputes and allegations soon emerged and led to the collapse of the deal.
Afghanistan has accused CAPEIC, the Chinese company, of failing to meet its commitments of investment, pay royalties on time, and complete key infrastructure and geological survey projects.
The Chinese firm disputes this and claims that the Taliban took over the project by force.
“The Taliban forcibly took over our joint venture oil fields and unreasonably drove our Chinese personnel out of the oil field at gunpoint,” one Chinese employee of the joint venture told NPR.
The employee, who had asked not to be named, told the media outlet that the Taliban detained 12 Chinese employees in Kabul and confiscated their passports. The Taliban also demanded that the Chinese leave all their equipment behind and leave the Taliban a Kabul bank account with millions of U.S. dollars in it.
A second Chinese employee told NPR, commenting on the Taliban practices, “Their business mindset does not include win-win outcomes. Like a bandit committing a robbery, they think, if I like it, then it’s mine.”
By Tsvetana Paraskova for Oilprice.com
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