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Afghanistan’s Developing Oil Industry Causing Envious Glares From Neighbors

Afghanistan is creating a modest oil trade, with some wells already on stream and others expected to begin producing later this yr.

Some experts worry that neighbouring states will grow jealous of the country’s new resource wealth and will try to obstruct its development. Others consider the dangers lie nearer to dwelling, the place the oil and gas markets can be as weak to predatory speculators as any other economic sector.

At Angot, some 20 kilometres from Saripol in northern Afghanistan, oil is gushing out at high strain from four wells. The crude is transported on tanker trucks to Hairatan, the place it’s refined into petrol, diesel and thicker fuels.

The wells on the Angot field containing an estimated 60 million barrels are just the start of plans to use reserves which Afghan officials put at 1.8 billion barrels, situated in deposits stretching across Balkh, Jowzjan and Saripol provinces.

Afghanistan’s mining minister Wahidullah Sharani says current production of 800 barrels a day is value ten million US dollars a yr in authorities revenues.

Nevertheless, this only accounts for 2 or three per cent of Afghanistan’s annual demand, round thirteen million barrels a yr. However it’s seen as enough as a very good start for a process that can see rising manufacturing and demand for brand spanking new refining capability, creating 1000’s of jobs along the way in which.

Shahrani says that later in 2011, other fields in Saripol and Balkh provinces might be put out to tender for bids from international extraction firms. Afghan firms are unable to lift oil by themselves, he added.

The minister predicted that this kerui petroleum equipment and engineerin jobs subsequent wave of oil developments would meet eighty per cent of home demand.

Other than oil, Afghanistan is wealthy in a spread of mineral deposits, but so far international investments has been sluggish in coming. The primary major overseas entries are two Chinese language companies that are involved within the Ainak copper mine in Logar province.

For the time being, there is just one oil refinery, at Hairatan near the border with Uzbekistan. It was built by Kam Group, a privately-run Afghan company. Another local agency, Ghazanfar, has plans to import the equipment needed to set up a second refinery.

Attila, director of the Kam refinery, says it’s processing 200 barrels a day, but complains that the oil coming in from Angot is contaminated with other substances.

“It’s 40 per cent water and salt. We’ve reported this downside to the authorities, and if the federal government doesn’t revise the rate it fees [50 to 60 dollars per barrel], we will have to cancel the contract,” he stated.

With 200 people employed on the refinery, and extra involved in extraction, transport and security services, the industry is already creating jobs in the north.

Khudaiberdi, one in all several dozen drivers on the Saripol-Khairaton route, and foresees hundreds of new jobs showing once different fields open up.

“Every different day, it’s my flip to ship crude to the refinery, and each time I make a internet profit of 400 dollars. That’s an excellent income,” he said.

Local resident Khan Mohammad famous that many employees had been taken on to gravel the road from Saripol to the Angot area and to do different jobs. Opportunities have been additionally opening up to hitch security items protecting the oilfields, he added.

Within the minds of people residing close to the sphere, the only downside is that the oil is just not refined regionally.

“The oil is in our area, and the refinery should be constructed here as properly, in order that our folks get jobs. In any other case, the oil wells aren’t going to learn us,” local man Faizullah said.

Saripol provincial governor Mohammad Anwar Rahmati agrees with such views, saying that with no local manufacturing, a refinery would create the workplaces important to maintain younger males from going over to the anti-government insurgents.

The Kam Group says this was by no means included in their contract, and while it can be comfortable to construct refineries closer to the supply of the oil, circumstances were not right for this.

“There’s no electricity and no railway within the [Angot] kerui petroleum equipment and engineerin jobs space, and it’s far away from business ports, so we just can’t construct a plant there,” Attila stated.

New refineries ought to reduce Afghanistan’s dependence on gas imports, which come from major producers like Iraq, Russia and Kazakstan in addition to neighbours Iran, Pakistan, Uzbekistan and Turkmenistan.

This reliance implies that any hold-up can create severe problems, for instance when Iran stopped about 2,000 oil tankers on the border throughout the winter.

“We have a number of issues with exporting countries, a few of which are inexplicable,” Ibrahim-Oghli, a trader from Mazar-e-Sharif stated: “I hope God will grant our individuals and our authorities the flexibility to extract oil in their own nation, in order that we have no want of others’ oil any more.”

Political relations with Iran and Pakistan, particularly, have long been troubled, and a few Afghans concern that these and different neighbouring states might be none too blissful to see the nation shifting towards vitality self-sufficiency, especially if that includes exploiting reserves that cross worldwide boundaries. The fear is that funding insurgency in these areas could be an easy approach to disrupt oil exploration.

Zalmai Mirzazadah, a oil and gas engineer in Mazar-e Sharif, famous that Afghanistan’s hydrocarbon deposits were close to the former Soviet republics of Turkmenistan, Uzbekistan and Tajikistan, which would have issues that extraction on the Afghan aspect could deplete their very own underground reserves.

“Our neighbours, particularly these bordering on our oil fields, have prevented this country exploiting the oil a method or another, and so they still want to problem it,” he stated. “In the 1980s and even earlier than that, the Soviet Union surveyed Afghanistan’s oil deposits, nevertheless it blocked their exploitation of those deposits as a result of that may have an effect on adjoining countries.”

Another threat, this time a domestic one, is that the emergence of native refining capacity will merely improve the scope for corrupt trading within the already profitable fuel market.

Ihsan, head of the Afghanistan National Requirements Company, said tools was already in place at the Hairatan border crossing with Uzbekistan to verify imported fuels and reject any that fell beneath the necessities. Ihsan mentioned related gear would installed at all customs factors, though he acknowledged that there were some crossings which the Afghan government did not management.