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Oil Extraction from Amu Darya Basin
Posted:Jun 26, 2012
 
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Masood Korosh

According to reports, finally, the much debated oil extraction from the Amu Darya Basin started. However, the level of production is not clear but previously Ministry of Mines and industry had told that in the first phase 5,000 barrel per day would be extracted and would increase multifold and reach to 45,000 barrel per day in the second phase.

Over the very issue, previously General Rashid Dostum, a highly influential member of Afghanistan National Front (ANF), a challenging coalition against President Karzai, was blamed for illegal use of force for banning of oil extraction. Some government officials called on Attorney General to persecute him, a problem which later on was resolved by direct intervention of President Karzai.

In his defense,Gen. Abdul Rashid Dostom clearly explained that he was worried of highly possible corruption. There was no transparency and moreover local people might benefit least.Local people are not employed rather employees are handpicked by government or particular circles having close links with key administrative and political figures from other parts of the country.

There is no data available to show whether his concerns were met and local people are recruited or not. The extraction has started and amidst mounting concern over level of corruption in civil and political establishment. It is widely suspected that rich mineral resources of Afghanistan might shrink rapidly with no palpable changes to common people's lives.Early, this month, economic adviser to European Union, Mehradad Emadi, wrote an article about mineral resources of Afghanistan.

Seemingly, he was amazed by recent acceptance of Afghanistan as observer of the Shanghai Cooperation Organization (SCO), and the promises and willingness of Russia and China, the two key members ofthe organization, of financial support and large investment to rebuild Afghanistan.

According to his briefing, the main reason behind such amove was rich mineral resources which are key factors for fuelling economic growth and development. And both China and Russia are in needing order to maintain their currently high economic growth.

Anyhow, the total oil resource revealed yet talk about existence of around two billion barrel. In such a case and in simple calculation,assuming the each barrel at price of $100, the total price of oil minerals goes beyond $150 billion dollars which is an astonishing sum for country with GDP of just 11 billion dollar.

In another word, if the country increases its capacity to produce100,000 barrel per day, the oil resources will last for more than 50years.
Moreover, Afghanistan is rich in terms of mineral resources. The estimated total price is calculated by foreign scientist around a trillion dollars while officials in ministry of industry and mines put the number to three trillion dollars. The quality and kind of mineral resources is another issue to be discussed.

The mineral of lithium one of the rarest as well as highly essential elements is too large as some used terms of like "Afghanistan is the Saudi Arabia of Lithium". It is used in production of chargeable batteries of computers, cell phones and other highly prevalent and expansive technologies.

The mounting pressure by environmental activists and the global project for greening of the earth will more than ever push the price of lithium remarkably up. There are global efforts around the world to bring down the level of green house gases concentration in atmosphere through using clean energies for industries.

Many countries have already levied carbon-tax in order to appreciate industrial productions with least effect on environment and increase their energy efficiency. Presently, automobile companies compete with one another to produce cars with least effect on environment by making them more energy efficient. There are hybrid automobiles, using electricity and fossil fuels alternatively.
Annually, companies reveal new types of electric cars in order to prevent the global warming.

In such technologies, lithium is a key element. It is capable of saving the energy. Therefore, it is said that lithium is the oil of tomorrow. Such large and valuable underground resources are the cause of optimism and perhaps it is right that many countries are eager to invest in the field of mineral resources.

Meanwhile, it should be noticed that selling minerals without processing inside the country has no major effects on people's lives.
However, it is too large and can bring welfare to people if transparency be considered and level of corruption diminished. But there are potentials to change Afghanistan from currently poorest rank to a powerful economic power in the region, as Mehrdad Emadi wrote in his article.

The profit of Afghanistan minerals is that large that can attract global companies with huge capital if the security situation gets better and they become confident that their asset would not be lost here. What is far more important is not the extraction of minerals and creation of jobs for just few thousand Afghans.

If these raw materials be processed inside the country and the "surplus value" be added to them, the Afghanistan can be changed into an industrial country not in very long future. Adding surplus value to minerals, on one hand, can increase coefficient of total value, on the other hand, broadens job market.Is government capable of such measures? Unfortunately, the answer is no. the above things I wrote seem much more like fantasy or unreachable dream.

The security situation is terrible and no one is ready to take such high risk, but it is not clear what will happen after 2014. Would government make militants to lay down arms and let the country bounce to normality? It is too early to judge about this issue.

Masood Korosh is the permanent writer of Daily Outlook Afghanistan. He can be reached at outlookafghanistan@gmial.com

The Daily Outlook, 27 June 2012

 

 
 
 
 
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