Afghanistan Times
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KABUL: The Taliban government has scrapped a major oilfield agreement with a Chinese company — the first major foreign investment since the group returned to power in 2021.
The 25-year deal, worth an estimated $540 million, was signed in early 2023 with Afchin Company, a Chinese state-linked oil and gas developer, to extract crude from the Amu Darya basin in northern Afghanistan. The project was seen as a cornerstone of the Taliban’s efforts to kick-start the war-torn nation’s economy and attract foreign capital.
But on Saturday, the Ministry of Mines and Petroleum declared the contract null and void, citing the company’s repeated violations of contractual obligations. “The contractor failed to meet financial, technical, environmental, and employment conditions laid out in the agreement,” said ministry spokesman Hamayun Afghan in a statement posted on X.
The deal had covered 4,500 square kilometers across Sar-e Pol, Jowzjan, and Faryab provinces, with promises of job creation, technology transfer, and a cash injection into Afghanistan’s crumbling economy. The Chinese side had pledged an initial investment of $150 million in the first year alone.
However, sources within the Taliban administration say Afchin fell far behind schedule on drilling, ignored requirements to employ local Afghan staff, and failed to implement environmental protections. An inter-ministerial committee reviewed the case and recommended termination, a decision later ratified by both the Economic Commission and the Prime Minister’s Office.
The abrupt cancellation marks a major setback in the Taliban’s drive to court international investors, and signals the regime’s increasing frustration with stalled or underperforming foreign projects. For China, it’s a rare public embarrassment in a country where it has long sought strategic influence through economic deals and infrastructure investments.
Despite the fallout, experts say Sino-Afghan relations are unlikely to collapse. “China still has deep security and economic interests in Afghanistan,” said a Kabul-based political analyst. “But this sends a warning: the Taliban are under pressure, and they want results — fast.”
The Ministry now plans to reopen bidding for the Amu Darya contract and is inviting international firms to evaluate and propose new terms. Officials have hinted that future agreements will include stricter oversight, clearer timelines, and tougher consequences for non-compliance.
For now, however, the cancellation casts doubt over whether Afghanistan under Taliban rule can be a reliable partner for major global investors — even those with longstanding interests in the region.
