The Taliban has annulled its first major oil agreement, a 25-year contract with the Chinese oil and gas firm Afchin, citing the company’s repeated failure to meet its contractual obligations.
On Tuesday, the Ministry of Mines and Petroleum announced the termination of the Amu Darya oil field contract, originally signed in January 2023. Ministry spokesperson Homayoun Afghan stated that the cancellation followed a formal investigation by a joint committee, which found Afchin had committed multiple breaches of the agreement.
“The contract was annulled due to repeated violations by the contracting company of its commitments,” Afghan wrote on X (formerly Twitter). He added that the decision was approved by the Taliban Prime Minister’s Office following a recommendation from the group’s Deputy Prime Minister for Economic Affairs.
The contract was initially signed in the presence of Abdul Ghani Baradar, the Taliban’s deputy prime minister for economic affairs, and China’s ambassador to Afghanistan. It involved a joint venture between China’s state-linked Central Asia Petroleum and Energy Company (CPEIC) and Afghanistan’s state-owned oil and gas company, with the Chinese side holding a 75 percent stake.
The agreement covered oil extraction from a 4,500-square-kilometre area spanning the northern provinces of Sar-e Pol, Jowzjan, and Faryab. It was expected to scale production from 200 tonnes of oil per day to 20,000 tonnes over time, with an initial Chinese investment of $150 million, rising to $540 million within three years.
Key provisions required the company to construct a refinery inside Afghanistan and banned the export of crude oil. Taliban spokesperson Zabihullah Mujahid previously confirmed that the deal included a clause for automatic cancellation if obligations were not fulfilled within a year.
The Ministry of Mines and Petroleum has not publicly disclosed the specific violations that led to the cancellation. However, officials have now invited international companies with oil sector expertise to review the legal and financial documents of the voided agreement and formally express interest in the project.
