Kabul : In a bold move reflecting growing tensions over unfulfilled foreign investments, the Taliban-led Ministry of Mines and Petroleum in Afghanistan has officially terminated a 25-year oil extraction contract with Chinese company Afchin. The decision was made due to multiple breaches of agreement terms, according to a ministry spokesperson.
The contract, which involved oil exploration and extraction along the Amu Darya River Basin, had been hailed as a strategic energy deal. However, the Taliban administration accused the Chinese firm of failing to deliver on its commitments, citing poor investment, insufficient drilling activity, lack of essential guarantees, failure to hire Afghan citizens, and overall negligence.
Official Statement from the Ministry
Spokesperson Humayoon Afghan stated that a joint inter-ministerial committee was set up to evaluate Afchin’s performance. “The investigation revealed repeated violations and the company’s inability to implement the contract terms,” said Afghan. Based on recommendations from the Office of Economic Affairs and directives from the Prime Minister’s Office, the government annulled the oil deal with immediate effect.
Reasons for Termination
-
Failure to invest adequately in the project
-
Lack of exploration and drilling operations
-
Absence of necessary financial guarantees
-
Neglect in offering employment to local Afghan citizens
The move signals a hardening stance from the Taliban government toward foreign firms that fail to meet obligations, especially in critical sectors such as oil and mining.
Economic Experts Weigh In
Economic experts within Afghanistan have welcomed the decision but also stressed the importance of thorough vetting in future mining and energy contracts. Many analysts argue that awarding contracts to companies with local Afghan partnerships could help avoid similar issues in the future.
Speaking to TOLO News, economist Mohammad Nabi Afghan said, “We urgently need oil and cannot afford to waste time. If foreign companies take on resources but fail to act, neither side benefits. The government must be cautious in drafting future contracts and avoid clauses that allow for such outcomes.”
He also urged the government not to let strategic projects drag on indefinitely, recommending clear timelines and accountability clauses in upcoming agreements.
The Bigger Picture
Afghanistan, rich in natural resources, continues to seek foreign investment to rebuild its fragile economy. However, under Taliban rule, trust and transparency issues remain significant hurdles. The cancellation of the Chinese oil deal may deter some investors—but it also sends a clear message: non-compliance will not be tolerated.
As the Taliban leadership attempts to balance international engagement with national interests, the emphasis now appears to be on self-reliance, efficiency, and ensuring tangible results from foreign agreements.
