China Signs First Oil Contract With Afghanistan

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Context

Afghanistan will sign a deal with Chinese state-owned National Petroleum Corporation to become the first foreign firm to produce oil in the country. Minister Wahidullah Shahrani will sign the deal, which calls for CNPC to form a joint venture with a local partner, Watan Group. 70 percent of the profit from the operation will be allocated to the government.

China will work on oil-blocks in the northeastern provinces of Sari Pul and Faryab. The provinces are located hundreds of miles from the fighting and thus are considered relatively safe.

The government said that the deal will be the first of its kind; the Company has been keen upon oil extraction for the landlocked nation that made it reliant on its neighboring countries for its fuel needs. Due to poor infrastructure and wars, other companies have shied away from investing in Afghanistan, but China has been on forefront.