Afghanistan and China on Wednesday signed the exploration of its first major oil storage of Amu Darya.
The China National Petroleum Corporation (CNPC) will invest $700m in Amu Darya oil zone in the coming five years.
The Chinese company is to start extraction at Amu Darya zone in the north of Afghanistan in 2012.
The oil deposits of Amu Darya zone were decided to be put out to tender in 2005 and finally the Chinese CNPC company won in the bidding in 2009.
According to the Ministry of Mines the Afghan government will receive 15% commission, 20% income tax and 70% percent of incomes of extractions.
"The extractions will start in October 2012. Mobilisation, drilling and working camps will be made a month after the contract is signed,"
Minister of Mines, Waheedullah Shahrani, said.
The Amu Darya Oil zone covers oil reserves in Sar-e-pul and Faryab provinces and it is able to produce 87 million barrels of oil.
The oil zone was discovered by a Swedish company in 1932.