The pumping of crude oil from northern Afghanistan will soon be a reality now that construction of the first well is underway. The value of oil fields in northern Afghanistan were recently pegged as being worth billions of dollars.
Experts have known since at least 2006 that the hydrocarbon resources lying under the surface of northern Afghanistan were a significant treasure, should anyone be able to access the riches. The latest survey revealed the extent of that wealth is larger than thought. The announcement of the find of another oil field has raised the value of Afghanistan's crude oil resources at just over $1 trillion, reported the Press Association. The newest field is expected to be open to tender early next year reported Radio Free Europe. The Ministry of Mines announced the new find.
Afghanistan has long been known for it's natural gas and minerals. The lastest finds of crude oil has created a buzz for the nation, but the trick, given the ongoing civil war, is extraction. Until recently, the fighting had been concentrated in northern Afghanistan. A recent calming of hostilities in the north has meant the construction of the first oil well could begin. Reuters reported American interests are behind the first oil well, but said Afghanistan officials would not reveal any details. It is not known when the first oil will be produced.
The oil is found in what was a hot arena in Afghanistan's civil war. Just last year, the mujahideen claimed control over the region known as Sar-i-pul. However, it appears that efforts by NATO forces in northern Afghanistan have paid off. The BBC reported earlier this month that business was thriving in the region, while the conflict has moved to the south of the country.
The Gulf News reports Afghanistan's new-found wealth has prompted some nations to throw their hats into the ring, pledging support this past week for the democratic government of Afghanistan in the fight against the Taliban. Time reported Russia plans to spend billions developing infrastructure and developing the buried mineral reserves, as well as pumping funds into Afghanistan's military.
Canada and the United States had said they would pull out of Afghanistan in 2011, but the new discovery of oil has prompted some pundits to predict the USA will not pull out.
The World Bank has given Afghanistan grants to help the country develop crude oil and mineral resources, which are owned by the government.
Afghanistan hopes to increase its annual revenues from mining to a billion dollars a year. Currently the government said it earns around $20 to $25 million a year from mining alone. However, development of Afghanistan's resources requires a large security contingent due to the Taliban insurgency.
The CIA Factbook sums up the challenges: "... Afghanistan is extremely poor, landlocked, and highly dependent on foreign aid, agriculture, and trade with neighboring countries. Much of the population continues to suffer from shortages of housing, clean water, electricity, medical care, and jobs. Criminality, insecurity, weak governance, and the Afghan Government's inability to extend rule of law to all parts of the country pose challenges to future economic growth. Afghanistan's living standards are among the lowest in the world. While the international community remains committed to Afghanistan's development, pledging over $57 billion at three donors' conferences since 2002, the Government of Afghanistan will need to overcome a number of challenges, including low revenue collection, anemic job creation, high levels of corruption, weak government capacity, and poor public infrastructure."
The Montreal Gazette reports that the Afghanistan government blames the West for the corruption. Spokesman for the president, Waheed Omer said "Our international partners provided the ground for some people in Afghanistan to become unbelievably rich. Some people (have) become an economic mafia in Afghanistan."
While progress developing infrastructure and capacity has been steady in northern Afghanistan, stability still remains elusive, reports the Bangkok Post.