Will the Afghan resources be developed?

The news this morning is full of breathless stories over the media's belated discovery of 3-year publicly available reports from the USGS on the mineral resource potential of Afghanistan. The figure of $1 trillion is being tossed around in headlines everywhere.

The focus in the stories is on copper and lithium, with many reporters unsure what lithium is and why anyone cares. However, they seem to have overlooked a companion study by the USGS on undiscovered petroleum resources of Afghanistan that came out in 2006 [right]. The USGS-Afghan team estimated mean volumes of undiscovered petroleum in northern Afghanistan of "1,596 million barrels of crude oil, 15,687 billion cubic feet of natural gas, and 562 million barrels of natural gas liquids. Most of the undiscovered crude oil is in the Afghan-Tajik Basin, and most of the undiscovered natural gas is in the Amu Darya Basin."

A colleague of mine in Denver who is well known and respected in the energy industry, a number of years ago showed me a satellite map of a fold and thrust regime in Afghanistan with huge surface anticlines they had interpreted. He and his associates were trying to acquire exploration licenses for petroleum.

I had lunch with him in Phoenix recently and asked whatever happened to their plans and learned that they had given up trying to work with the Afghani government. He said the demands were so onerous and unrealistic that no project would be successful no matter how rich the deposit.

So, in reading today's headlines, I have to wonder if some of the same factors are the reason we have not seen the mining industry rushing in during the past three years to go over this potential treasure trove of minerals in that country. Of course, political uncertainty and security are perhaps even bigger factors.