The move to develop the Amu Darya field aligns with the Taliban’s goal of self-sufficiency, but can the cash-strapped regime go it alone?

By Patrick Yeager August 01, 2025 Credit: <a>Depositphotos</a>

In late July, Afghanistan’s Taliban-run government decided to <a>pursue unilateral development of the Amu Darya oil field</a>, at least for the time being. It seems unlikely the cash-strapped regime will be able to maximize the potential of the oil field without foreign investment, but it will still be able to collect millions of dollars in revenue by going it alone. 

The move aligns with the Taliban’s oft stated <a>goal of self-sufficiency</a>. However, international investors may be troubled by the fact that an Afghan <a>deal with a Chinese company</a> to operate the relatively small concession lasted less than 18 months. 

The Taliban have worked to consolidate <a>control over Afghanistan’s smaller resource deposits</a> while <a>graduating to bigger deals with foreign countries</a>, resulting in <a>a moderate increase</a> in revenue last year. However, if the Taliban regime is going to generate enough money to provide even basic services to Afghan people it will have to provide better oversight than it did on the Amu Darya concession.

The government’s decision to partner with Xinjiang Central Asia Petroleum and Gas Company (CAPEIC) was unusual. The company is reportedly <a>an offshoot from the goliath PetroChina</a>. While the <a>firm claims offices</a> in North America, Africa, Central Asia, the Middle East, and East Asia, there is little information available about CAPEIC’s projects. According to the firm’s website, the last claimed field work it completed was <a>in Kazakhstan and Belize in 2008</a>. 

There was little press about CAPEIC before it signed the 2023 deal with the Taliban, and not much since then. The company did not make any public statements when the Taliban ended the oil deal, <a>claiming breach of contract</a>.

Afghanistan had made progress on the Amu Darya concession, enabling the Taliban to collect revenue alone until the government needs to develop the basin further. Before the cancellation, the Ministry of Mines and Petroleum <a>announced</a> that it was sending an undisclosed number of Afghan engineers to China for training. The government also activated <a>25 new wells at the concession</a> last October. In December 2024, the ministry announced it <a>received all of the necessary equipment for exploitation</a> of the Amu Darya basin from China. These improvements likely informed the Afghan government’s <a>announcement</a> that it has no formal interest in transferring operations to the private sector. 

Early sales suggest there is sufficient infrastructure and international access in place for the Taliban to go it alone. The Ministry of Mines and Petroleum <a>made $27 million</a> from the auction of 60,000 tons of oil in January 2024 and another <a>$30 million on the same amount</a> of oil in May 2024. The Taliban <a>signed an agreement</a> to process oil in Uzbekistan in September 2024 and a new oil refinery in Balkh <a>came online</a> in January 2025. Oil made up <a>more than 80 percent</a> of the Ministry of Mines and Petroleum’s revenue in 2024 and that seems likely to continue in 2025 barring any new issues.

Outwardly, the cancellation of the contract with CAPEIC has not affected ties between China and Afghanistan. Immediately after Kabul withdrew from the deal, Taliban Deputy Prime Minister for Administrative Affairs Abdul Salam Hanafi <a>departed for China</a> to advocate for scientific and research collaboration. On July 25, China’s special envoy for Afghanistan, Yue Xiaoyong, <a>had a “very good” meeting </a>with Taliban Foreign Minister Amir Khan Muttaqi. Beijing’s lack of comment on the cancellation is a positive sign for the Taliban.

However, there may be trouble ahead in the bilateral business relationship. China’s other major project in Afghanistan, the Mes Aynak Copper Mine, continues to flounder. Chinese engineers started <a>building a road to the mine</a> in July of last year, but little progress has been made since then. Taliban leaders continue to ask the state-owned Metallurgical Corporation of China (MCC) <a>to make progress at Mes Aynak</a>. In October 2024, MCC officials noted that the <a>lack of meaningful power infrastructure at the site</a> limited further development. On May 10 of this year, Deputy Prime Minister for Economic Affairs Abdul Ghani Berader <a>again asked for MCC</a> to begin meaningful work at the site. Mes Aynak’s potential revenue dwarfs even the high-end projections for the Amu Darya oil field, so it may pay for the Afghan government to wait. 

A setback in Amu Darya <a>is hardly surprising</a> considering the limited credentials of the foreign vendor, the Taliban’s lack of experience running major mining concessions, and Afghanistan’s limited supporting infrastructure. The extractives industry, in general, and the Amu Darya oil field, in particular, are critical to the Afghan government’s budget. Monitoring developments at Amu Darya will provide key insights into the Taliban’s increasingly opaque revenue streams. The Ministry of Mines and Petroleum must succeed at Amu Darya to help fund the government and assure potential international partners that Afghanistan is a suitable investment.

Taliban End Chinese Oil Field Contract in Afghanistan

The Taliban government of Afghanistan has terminated its oil field contract with a Chinese company, CAPEIC, to pursue self-sufficiency. Despite the deal's short duration, the Taliban aims to generate revenue from the Amu Darya field. The move highlights challenges in managing resource projects, with ongoing issues at the Mes Aynak Copper Mine project. Revenue from oil sales and infrastructure developments remain critical to the Afghan government's budget.