More top-tier energy companies are likely to join the race to explore for oil and gas in Afghanistan after the world’s biggest publicly traded firm, Exxon Mobil (XOM.N), changed perceptions of what the country may hold by showing interest in drilling.
Energy majors are exploring new frontiers in pursuit of fresh reserves as they exhaust existing fields and Afghanistan, after decades of conflict, remains little explored.
While the U.S. government estimates the country holds a fraction of the reserves of surrounding giant Middle East producers, its potential is enough to attract Exxon Mobil and that factor, by itself, is likely to lure more.
Kabul, which has long depended on international donations to finance its economy, now hopes revenue from raw materials will help the country stand alone, especially as an impending pullout of most foreign troops by the end of 2014 is creating donor fatigue.
“Exxon would not go into an area unless the areas are very promising. They are not looking for potatoes,” said Chakib Khelil, former Algerian oil minister, now an energy consultant in Paris.
The search for fresh assets by big companies such as Exxon, which produce a lot could mean “going to the Arctic, going deep off-shore and going into new areas like Afghanistan,” he added.
Eight firms including Exxon this month expressed interest in an oil and gas auction of six blocks in the Afghan-Tajik basin, after a tender was won by China National Petroleum Co (CNPC) late last year.
Afghanistan has about 1.9 billion barrels of undiscovered technically recoverable crude reserves, the United States Geological Survey (USGS) said in 2011, although it didn’t say how much of it was economically recoverable.
That compares to Equatorial Guinea, which has proven reserves of 1.7 billion barrels and produces about 250,000 barrels of crude a day, according to BP’s (BP.L) latest annual statistical review.
With oil hovering around $100 a barrel, an output of 250,000 bpd would earn Afghanistan about $9.1 billion a year. That would be roughly half the country’s gross domestic product of $20 billion in 2011, according to the World Bank.
The country also has an estimated 59 trillion cubic feet of natural gas reserves, about half that of the proven reserves in neighbouring Iraq, according to BP.
The Tajik basin, for which Kabul invited bids earlier this month, has about 946 million barrels of crude and 7 trillion cubic feet of natural gas reserves, the survey found.
The Amu Darya basin, which CNPC, China’s biggest oil and gas producer, is exploring after it won the tender last year, has 962 million barrels of crude and 52 trillion cubic feet of natural gas, according to USGS …
Read More: Reuters
Please, tell me again how the West are the good guys in all of this.