Islamic Emirate of Afghanistan’s (IEA) officials signed a contract on Thursday with China’s CAPEIC (Xinjiang Central Asia Petroleum and Gas Co) Company for the extraction of oil in the Amu River basin, which covers a large area across parts of three northern provinces.

The signing ceremony was held at the Government Information and Media Center (GMIC) in Kabul, in the presence of Mullah Abdul Ghani Baradar Akhund, the Economic Deputy of the Prime Minister, and China’s ambassador to Kabul.

Speaking at the event, Sheikh Shahabuddin Delawar, the Minister of Mines and Petroleum, said: “According to the order of the Supreme Leader and the guidance of the Prime Minister and the Economic Deputy of the Ministry, today we will sign an oil extraction contract with a Chinese company.”

The ministry said oil will be extracted from an area covering 4,500 square kilometers across parts of Sar-e-Pul, Jawzjan and Faryab provinces.

Delawar said the rate of oil extraction will be from 1,000 to 23,000 tons per day and the company will invest up to $150 million dollars a year, which will increase to $540 million dollars in three years.

According to the contract, the Islamic Emirate will own a 20 percent share in the oil fields, but that in time this percentage will increase to 75 percent.

Delawar also said that 3,000 jobs will be created for Afghans. However, if skilled labor is not available in Afghanistan, then China will be able to import workers, he added.

He also said that it was agreed that if the Chinese company does not fulfill all its requirements within a year, the contract will automatically be canceled.

Mullah Abdul Ghani Baradar Akhund also spoke at the event and said that in the past year, work has been done to promote development in the country.

“Recently, several projects were approved by the Economic Commission, and with their implementation, fundamental steps will be taken regarding the prosperity of the country and public welfare,” Baradar said.

He said the signing of Thursday’s contract was an important step towards the country obtaining self-sufficiency. He also called on the Chinese company to work in accordance with international standards and to provide local people with public benefits.

Baradar also told the ministry of mines to closely monitor developments at the oil field so as to ensure the Chinese company fulfills its obligations.

China’s Ambassador to Afghanistan Wang Yu meanwhile said: “This contract is important for the economic growth and self-sufficiency of Afghanistan and is a good example of cooperation and interaction between the two countries.”

Wang asked the contracting company to carefully perform the assigned tasks according to the provisions of the contract and also asked the ministry to provide the framework for the effective implementation of the contract and to work closely with the contracting company.