The Ministry of Mines and Petroleum (MoMP) has commissioned a private company to conduct oversight on all activities of Afg-Chin Oil and Gas Ltd.

Six domestic companies bid for the contract, the ministry said.

Shahabeddin Delawar, acting Minister of Mines and Petroleum, said that the purpose of supervising the activities of Afg-Chin Oil and Gas Ltd, which primarily extracts oil and gas in northern Afghanistan, is to ensure transparency.

According to Delawar, Afghanistan has a 20 percent share in the contract signed with Afg-Chin Oil and Gas Ltd. In line with this, it is necessary for oversight, he said.

This comes amid a flurry of activity in the mining sector in Afghanistan.

Since regaining power in August 2021, the Islamic Emirate has prioritized the development of mining on the whole.

While many of the mines are in the early stages of development, the Islamic Emirate’s initiative has had some results.

According to the World Bank, Afghanistan’s domestic revenue increased 22 percent year-on-year in April and May thanks to the auction of mines and resources such as oil, emeralds and nephrite, a type of jade prized in China.

An oil refinery consortium, comprising five local companies, has been established in Balkh province with an investment so far of $87 million.

Speaking at a press conference in Balkh, consortium officials said that they had joined forces to ensure oil extracted in the country is refined locally, which in turn creates job opportunities.

“This refinery has been established with an investment of $400 million, of which $87 million has already been invested and the remaining $313 million will be invested,” said Abdul Rashid Salaar, technical officer for the consortium.

“This refinery will be built in four phases, over one to five years,” he added.

Consortium members have appealed to the Islamic Emirate to cooperate with them and to support the mining sector in the country.

One member said 1,100 tons of crude oil was extracted daily in Afghanistan but that the consortium would soon have the capacity to refine 4,300 tons a day.

“This consortium is for the self-sufficiency of the country in the oil and gas sector, and for job opportunities,” said another consortium member.

Growing foreign interest in the sector

Afghanistan’s Ministry of Mines and Petroleum last week reported that the country’s lucrative oil sector is generating growing interest from a number of countries in the region including Iran, Turkey, Russia and Uzbekistan.

According to officials, companies in these countries have shown serious interest in investing in the extraction and refinement processes.

The ministry has however called on Afghan investors to also take advantage of opportunities in the sector.

Afghanistan’s Crude Oil Refinery Union in turn urged the Islamic Emirate to support local investors in the extraction process but also by establishing refineries that meet international standards.

Afghanistan Chamber of Commerce and Investment (ACCI) officials meanwhile called on the ministry to also focus on increasing the operational capacity of established oil extraction companies and in building refineries instead of focusing on attracting foreign investors.

Muhammad Younus Mohmand, Vice-Chairman of the ACCI, said: “Our wish is that the refineries that people invest in, in Afghanistan, should be supported.”

According to union officials, over $300 million has already been invested in the sector in the country, providing jobs to thousands of workers.

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