Late last year the China National Petroleum Corp (CNPC) signed a deal with Afghanistan to explore and develop oil blocks in the Amu Darya basin in the north. The deal is the first international oil agreement by the Afghan government in several decades.
After three decades of war and unrest in the region many foreign companies have been unwilling to invest in oil exploration in Afghanistan, and China are now finding out why. Militia loyal to army chief of staff, and ex-warlord, General Abdul Rashid Dostum, have been disrupting oil exploration activities by the Chinese state firm.
The Chinese deal covers the northern provinces of Sar-e Pul and Faryab, home to Dostum, a powerful former warlord, and whose people are, according to a top aide to Karzai, "intimidating the Chinese engineers in the area and creating obstacles to exploring the oil block" and also demanding a share of the proceeds from any oil discoveries.
Afghanistan's mineral wealth is predicted to be $3 trillion and will prove vital to rebuilding the nation after so many years of conflict. China and India have already invested large sums into securing deals to extract the mineral riches. The Amu Darya deal is the second huge Chinese deal, after the Metallurgical Corp of China signed a contract in 2008 to develop the huge Aynak copper mine south of Kabul.
In an effort to aid the Chinese oil explorers in the north, and avoid scaring off too many potential foreign investors, Karzai has asked the interior ministry to send 300 policeman to secure the Amu Darya site.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com More