The contract for the extraction of oil from the Amu Darya basin was signed with a Chinese company, the CPEIC, on Thursday.
The contract was signed at a ceremony in which senior members of the Islamic Emirate and the Chinese ambassador in Kabul Wang Yi participated.
Speaking to the ceremony, the acting minister of mines and petroleum, Shahabuddin Delawar, said the first three years will be exploratory and that in this period more than $540 million will be invested.
“The first three years are exploratory. In this period, 4,500 square kilometers will be under the project in three provinces, including Sar-e-Pul, Jawzjan and Faryab. At least 1,000 to 20,000 tons of oil will be extracted,” he said.
Delawar said that if the company failed to fulfill the pledged principled, the contract will be canceled.
“Both sides should work together and cooperate closely to beaut the project into a successful model of China-Afghanistan cooperation,” said Wang Yu, China's ambassador to Kabul. "So it has confidence for more foreign investors to develop their business in Afghanistan. China and Afghanistan are linked by mountains and water and share the same fate."
The contract is due for 25 years.
At the same ceremony, the first deputy Prime Minister, Mullah Abdul Ghani Baradar, urged the CPEIC to implement the required norms for the extraction of the oil.
“We request the Chinese company to extract the oil based on international measures. The company will have the support of government institutions,” he said.
The Islamic Emirate will get a 20 percent share in the project and 15 percent in its profit and it will increase to 75 percent in the coming years. The project will also provide jobs to at least 3,000 people in the country.