Saudi capital invests $10 billion in Afghanistan's oil and gas!

In September 2026, Saudi Delta Energy (Delta Energy) signed a series of oil and gas exploration and development agreements with Afghanistan, covering exploration in the Kushk-Tirpul Basin in the west, a study on natural gas utilization in Herat, and a proposed 700-km cross-border natural gas pipeline, the “CentGas – Corridor of Prosperity.” The pipeline investment is estimated at up to $10 billion, while the potential investment scale of the entire project cluster could reach $50–60 billion.

For a country long ravaged by war, with shattered infrastructure and questionable international recognition, this deal is undoubtedly the most significant foreign investment in Afghanistan's energy sector in recent years, and its significance is obvious. At present, oil produced domestically in Afghanistan meets only 15.7% of national consumption. Afghanistan's Minister of Mines and Petroleum, Hidayatullah Badri, has clearly stated that he hopes to achieve natural gas self-sufficiency through exploration and development. For a country with a GDP per capita of only a few hundred dollars and heavy reliance on energy imports, domestic development of oil and gas resources concerns not only energy security but also fiscal balance and economic reconstruction.

So what exactly does Saudi capital see in it?

On September 7, 2026, Afghanistan's Minister of Mines and Petroleum, Hidayatullah Badri, and Delta Energy CEO Shaher Al-Taqi signed the agreement on behalf of both sides. Notably, former U.S. Special Representative for Afghanistan Zalmay Khalilzad attended the signing ceremony. After the meeting, Khalilzad said the deal "shows that Afghanistan is ready to do business."

The core terms of the deal consist of three parts:

First, an exploration and production sharing contract. Delta Energy obtained the rights to exploration and development in the Kushk-Tirpul Basin. The basin is located in Herat and Badghis Provinces in western Afghanistan. The contract covers an area of about 23,317 square kilometers, divided into 11 blocks. The contract term is 25 years, including an 8-year exploration period. The initial investment is $200 million, to be used for geological and geophysical studies, seismic exploration, exploratory drilling, and reservoir evaluation.

Second, a natural gas utilization study. Delta will fund and conduct a study on natural gas utilization in the Herat area, covering Herat Industrial Park, Herat city, and other designated areas, assessing the prospects for using natural gas for industrial production, power generation, and other energy needs.

Third, the CentGas pipeline study. The most eye-catching part is a proposed 700-km natural gas pipeline, code-named “CentGas – Corridor of Prosperity.” The pipeline starts near the Guzara area of Herat Province and ends in the Spin Boldak area of Kandahar Province near the Pakistani border. Delta estimates that this pipeline alone requires about $10 billion in investment and a 10-year construction period.

Delta Energy gave two different investment estimates in its press release: about $50 billion over 25 years for the entire project cluster, or about $60 billion over 10 years for exploration, oilfield development, natural gas utilization, pipelines, and related facilities combined. The company did not reconcile the two figures, and explicitly stated that both are conditional estimates and do not represent committed investment.

Delta Energy emphasized that pipeline construction depends on successful exploration, confirmation of sufficient reserves, technical and economic feasibility, financing, regulatory approvals, and a final investment decision. Sheikh Badr Mohammed Al-Aiban, Chairman of Delta International Holding Group, said the company would proceed in phases, starting with exploration and technical assessment, and then decide whether to enter subsequent development stages.

Almost at the same time, Afghanistan also signed a $13.8 million agreement with the Russian company TNG, covering supervision and consulting services for the Amu Darya oil basin and the construction of a flexible production facility with a daily processing capacity of 2,000 tonnes in the Zamrad Sai block. In addition, Uzbekistan already launched development of the Tuti-Maidan gas field in northern Afghanistan in September 2025; the field has estimated reserves of about 3 trillion cubic meters, and total investment is expected to reach $1 billion. Afghanistan is simultaneously attracting capital from multiple parties—Saudi Arabia, Russia, Uzbekistan, China, and others—into its energy sector.

The primary factor behind Saudi capital’s turn toward Afghanistan is its resource endowment. Afghanistan’s oil and gas exploration history dates back to the Soviet era. In the 1960s and 1970s, the Soviet Union invested heavily in geological surveys and infrastructure in northern Afghanistan. At its peak in the late 1970s, Afghanistan exported up to 3 billion cubic meters of natural gas per year to the Soviet Union. Subsequent decades of war caused production to collapse and infrastructure to age and fall into disrepair.

According to data from a joint assessment team of the U.S. Geological Survey (USGS) and the Afghan Ministry of Mines and Petroleum, the mean undiscovered crude oil resources in northern Afghanistan are about 1.6 billion barrels, and natural gas about 16 trillion cubic feet. Other estimates suggest Afghanistan’s nationwide crude oil reserves could reach 1.8 billion barrels. A 2026 USGS continuous resource assessment of the Amu Darya Basin (covering Turkmenistan, Uzbekistan, and Afghanistan) shows mean technically recoverable resources of 519 million barrels of crude oil and 82.9 trillion cubic feet of natural gas. For the Afghan side of the Amu Darya Basin, some institutions estimate recoverable crude oil at about 962 million barrels and natural gas at about 52 trillion cubic feet.

Afghanistan's proven natural gas reserves are currently estimated at between 150 and 200 billion cubic meters, while potential resources may be even larger. The provinces in the north bordering Turkmenistan and Uzbekistan contain the richest untapped natural gas resources. The estimated reserves of the Tuti-Maidan gas field alone reach 3 trillion cubic meters, demonstrating the considerable scale of its resource potential.

In addition, Afghanistan’s geographical location is central to its energy strategic value. Former U.S. Special Representative for Afghanistan Zalmay Khalilzad noted after the signing ceremony that Afghanistan has long been regarded as a “land bridge” connecting Central Asia (a resource-rich region) and South Asia (a densely populated region with huge resource demand), and that now, in addition to its role as a bridge, Afghanistan itself is expected to become a source of abundant resources for global markets, especially the South Asian market.

This assessment points directly to the strategic intent of the CentGas pipeline. The pipeline extends from Herat to Spin Boldak (on the Pakistani border), essentially building an export corridor to transport natural gas resources from western Afghanistan to Pakistan and South Asian markets. Considering that the Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline is moving forward—its approximately 153-km Serhetabat-Herat link in Afghanistan broke ground in September 2024, and the full TAPI line is designed with an annual gas transmission capacity of 33 billion cubic meters—CentGas and TAPI have a certain relationship of synergy and competition in terms of route. Both pass through Herat and both target the South Asian market. If CentGas is realized, it will create an independent export corridor for Afghanistan's own resources, rather than merely serving as a transit country for Turkmenistan's resources.

Against the backdrop of the global energy transition, Saudi Arabia is actively expanding overseas oil and gas assets to consolidate its global energy influence. Afghanistan’s untapped oil and gas resources, its location adjacent to high-growth South Asian markets, and the current delicate situation of de facto engagement by the international community with the Taliban regime together constitute a window of both risk and reward. The remark by Delta’s chairman that “this is far more than an oil and gas investment” hints precisely at this kind of geoeconomic strategic positioning.

For the global oil and gas industry, Afghanistan is re-entering the resource map from a forgotten corner. Although the USGS assessment data are not commercial reserves, they are sufficient to show that its resource potential cannot be ignored. As part of the Central Asian oil and gas system, the Amu Darya Basin’s geological accumulation conditions are comparable to those of developed gas fields in Turkmenistan and Uzbekistan. If Delta Energy’s exploration makes a breakthrough, Afghanistan could become a new supply node on the Central Asia–South Asia energy corridor.

However, from the initial $200 million exploration investment to the $10 billion pipeline, there lie numerous obstacles in between, including geological risks, financing challenges, the security environment, and international recognition. In any case, this deal marks the beginning of a new round of competition among international capital in Afghanistan’s energy sector.