China National Petroleum Corporation, the country’s largest oil company, has entered a deal with Afghanistan’s government to exploit the country’s oil and natural gas reserves

China National Petroleum Corporation, the country’s largest oil company, has entered a deal with Afghanistan’s government to exploit the country’s oil and natural gas reserves, the official Xinhua News Agency reported.

The deal, signed in Kabul, allows the Chinese oil giant to develop Afghanistan’s Amu Darya basin, a project expected to yield about 7 billion U.S. dollars in profits.

Reserves in the block are estimated at about 87 million barrels, but both the Afghan and Chinese partners believe they will prove to be much larger.

This has been the first oil exploitation pact with other countries by Afghanistan’s government for around a decade, and also the first for Chinese companies to tap this market.

The deal covers oilfields in the northeastern provinces of Sari Paul and Faryab, and an oil refinery with an investment of 300 million U.S. dollars.

CNPC will pay Afghanistan 15 percent in royalties, 20 percent in corporate tax and as much as 70 percent of profits from the project, according to the deal.

Source:caijing