Afghanistan shortlists 3 companies for oil project

KABUL, Afghanistan (AP) — The Afghan government has shortlisted companies from Kuwait, the United Arab Emirates and Turkey for a major oil and gas exploration project, a step in the country's quest to reap revenues from its vast untapped mineral and energy resources.

Minister of Mines Wahidullah Shahrani said Monday that bids from Dubai's Dragon Oil, Kuwait Energy, and the Turkish Petroleum Corp. have been selected for the tender involving exploration rights in the Tajik Basin in northern Afghanistan.

The basin's oil reserves are estimated at more than 1 billion barrels.

The government said in a statement that the bids will be considered in a "thorough, transparent, and fair bidding process until the announcement of the results of the evaluation process," adding that the contract will be signed in March. The statement said 20 international companies had expressed interest in the project and that eight were judged eligible, including Texas-based Exxon Mobil.

The Tajik Basin is located between the northern cities of Mazar-i-Sharif and Kunduz. The tender includes the six blocks known to contain hydrocarbon reserves. The blocks may be awarded to a single bidder or to multiple bidders, the ministry said.

Afghanistan has been looking for ways to exploit some of its mineral wealth to offset the loss of revenues when foreign aid and spending drops in step with the withdrawal of international combat troops by year-end 2014. The government has been keen to develop an oil-extraction and refining capability for the landlocked nation, which is entirely reliant on fuel imports from neighboring Iran and Central Asian countries.

Afghanistan's mineral wealth — estimated at up to $3 trillion dollars — has been detailed in several surveys, the most extensive of which were conducted by the Soviets in the 1970s. Mining companies, both Afghan and foreign, have already shown interest, notably in its copper, iron and oil. Also highly sought are so-called rare earth elements, used in cell phones, hybrid car batteries, wind turbines and by the defense industries.

But most mineral riches are scattered throughout the country, including in the war-wracked southern and eastern areas.

China's National Petroleum Corporation became the first foreign company to start oil production extraction in Afghanistan, and is scheduled to build the country's first refinery within the next three years.

The Chinese firm's contract covers gas blocks in Sari Pul and Faryab, an area known as the Amu Darya River Basin that was first explored by Soviet engineers in the 1960s.

China has also made a hefty investment in Afghan minerals, signing a $3 billion contract to mine copper.