Afghanistan announced on Thursday an oil agreement with a Chinese energy giant to extract oil from the Amu Darya basin in the northern part of the country.

China's Xinjiang Central Asia Petroleum and Gas Co (CAPEIC) will be in charge of the project and will invest up to $540 million a year within three years.

Acting first deputy PM for economic affairs in the Afghan government Abdul Ghani Baradar stated that the deal will boost his country's economy and strengthen its independence.

"The contractor will invest up to $150 million a year, which will increase to $540 million in three years,"  according to the minister.

According to estimates made by the Afghan authorities, the Central Asian country's oil reserves are around 1.8 billion barrels, a much-needed resource to be tapped into as the country faces an economic crisis due to the long years of US occupation and Washington's decision post-withdrawal to freeze $7 billion belonging to the country as it opposed Taliban's rise to the ruling and the ousting of the previous US-backed government of Ashraf Ghani.

Since then, Afghanistan has been hit by a winter food crisis, an economic collapse, and a terrible earthquake. Kabul's new leaders have been lobbying Washington to release their national assets.

Last December, former Afghan President Hamid Karzai admitted that he had a hand in the corruption that took place in his country during his tenure, also highlighting that the United States was involved in the corruption in question.

On the other hand, In addition to contributing to the development of Afghanistan, China has aided the country with food, winter materials, COVID-19 vaccines, and medicines worth 200 million yuan in 2022.

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The oil extraction will take place in Jowzjan and Sar-e Pol in northern Faryab with an initial quantity of one thousand tonnes per day.

According to the agreement, Afghanistan will receive a 20% share at the beginning of the project and then will rise gradually to 75% as the oil produced increases.

Authorities in Afghanistan estimated that the project will create some 3,000 jobs.

Baradar stated that the former government, led by ousted President Ashraf Ghani, previously signed an oil contract with a different Chinese company but was suspended.

However, if CAPEIC failed to meet the project requirements per the agreement the contract will be automatically terminated.

Earlier in July 2022, the Afghan embassy in China said that Chinese companies are interested in investing in Afghanistan, most notably, its mining infrastructure and the energy sector.

It's noteworthy that China shares a 76-kilometer border with Afghanistan: However, China has feared for many years that Afghanistan could become a springboard for religious extremism and Uyghur separatism in Xinjiang.  

Beijing has been maintaining friendly ties with the Taliban-led government after US forces withdrew from Afghanistan.

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