x Abu Dhabi, UAETuesday 25 July 2017

Afghan oil and gas sector opens

Afghanistan is seeking bidders for oil and gas exploration and production concessions in its Amu Darya Basin.

Wahidullah Shahrani, the Afghan minister of mines, says his country is an attractive market for the oil and gas sector.
Wahidullah Shahrani, the Afghan minister of mines, says his country is an attractive market for the oil and gas sector.

Afghanistan is seeking bidders for oil and gas exploration and production concessions in its Amu Darya Basin, the country's first move in four decades to open its hydrocarbon sector to international investment.

Wahidullah Shahrani, the Afghan minister of mines, told a conference in London on Monday Kabul was seeking "expressions of interest for contracts to explore, develop and produce hydrocarbons" in parts of northern Afghanistan that could contain more than 80 million barrels of oil.

One of the three blocks on offer contains the Angot oilfield, which currently produces oil, the ministry said.

"The tender has already attracted substantial international interest," Mr Shahrani said. "Afghanistan is an attractive market for the oil and gas sector, and we look forward to a successful bid round."

The oil ministry said companies and consortiums should submit expressions of interest no later than noon Kabul time on March 29.

"This is expected to be the first of several tenders for Afghanistan's oil and gas resources over the next few years," the ministry said. Bids are due in early June and contracts are expected to be awarded by the end of July.

The contracts on offer would be profit-sharing deals that allowed developers to recover their costs before paying royalties on oil and gas production to the government.

"At present, the priority for hydrocarbon exploration is northern Afghanistan because of its similar geology to known regions," the ministry said.

"The geology is similar to the vast hydrocarbon reservoirs of Turkmenistan, Uzbekistan and Tajikistan across the northern border."

The north of Afghanistan is also more secure than its southern provinces, which contain Taliban strongholds.

The US geological survey in 2006 estimated northern Afghanistan's undiscovered hydrocarbon resources at 1.6 billion barrels of oil, 16 trillion cubic feet of natural gas and 500 million barrels of gas liquids.

In August, Afghanistan started pumping a modest 800 barrels per day of crude from the Angot field in the rugged northern province of Sar-i-Pul, representing the country's first oil production.

In a notice on its website, the ministry said it would host an information session in Kabul next Monday for local businesses interested in working with international oil and gas companies in the Amu Darya Basin. It predicted "many opportunities" for Afghan businesses to work with foreign partners in "various business sectors".

tcarlisle@thenational.ae