China's Central Asia Oil and Gas Company boosts Afghanistan's oil output fourfold with new wells in Xinjiang
China's Central Asia Oil and Gas Company, operating in Xinjiang, has quadrupled oil production in northern Afghanistan by drilling 10 new wells, marking a significant stride in the energy sector.
The company, despite the international community's hesitations about the Taliban-led government in Afghanistan, continues to invest substantially in the development of oil fields.
The recently drilled wells in Sare-e-Pol are part of a broader initiative outlined in a contract signed in January 2023, requiring a total investment of $540 million over three years.
Under the terms of the contract, China Central Asia Oil and Gas committed to investing $150 million this year alone, contributing to the expansion of oil exploration and production activities in Afghanistan.
The projects are expected to generate an annual revenue of $500 million for the Taliban-led government.
Although Afghanistan possesses an estimated 150 million barrels of oil reserves, lack of development has led the country to heavily rely on oil product imports, costing over $1 billion annually.
The injection of foreign investment and expertise is anticipated to not only boost oil production but also drive economic growth and reduce Afghanistan's dependence on oil imports.
China, despite not officially recognizing the Taliban-led government, has actively engaged in various contracts related to oil field development and metal mining in Afghanistan.
These ventures, including the recent expansion of oil production, underline China's strategic economic interests in the region.
Beyond the energy sector, China's economic ties with Afghanistan have witnessed substantial growth.
Customs statistics reveal that China's exports to Afghanistan surged by almost 2.5 times in the first 10 months of 2023 compared to the same period the previous year, exceeding $1 billion.
In reciprocation, Afghanistan's exports to China also experienced notable growth, reaching $43 million with a remarkable 130% increase.
The deepening economic relations between China and Afghanistan, spanning oil production, mining, and trade, showcase the pragmatic approach both sides have taken in navigating their diplomatic and economic ties.
