Afghan mining minister Waheedullah Shahrani and CNPC president Lu Gong Xun inked the contract and conveyed best wishes for the project.
According to the deal, Afghanistan will get 70 per cent of the net profit and the Chinese oil company will pay 15 per cent corporation tax. China National Petroleum Corporation will develop three oil fields in north of Afghanistan along the Amu Darya.
“This will have enormous benefits for Afghanistan,” Shahrani told reporters after the signing.
Afghanistan accepted the bid of energy hungry China, which is pushing into oil-rich countries to secure the resources needed to fuel the world’s second largest economy while rejected the four others.
The deposits are estimated to contain about 87 million barrels of oil, relatively small globally but significantly profitable for Afghanistan, Shahrani said.
“If there are 87 million barrels of oil and each barrel is estimated at $100, Afghanistan will make about $7 billion in the next 25 years,” the minister said.
On Monday, Afghanistan has also inked fuel deal with Iran to supply its neighbour with a million tons of fuel oil, petrol and aviation fuel a year.
Land locked Afghanistan imports its oil and gas from Central Asian countries and Iran.