Afghanistan, China sign first oil contract

KABUL, Afghanistan (AP) — Afghanistan's government has signed a deal with China's state-owned National Petroleum Corporation to exploit oil and natural gas in a northwestern region.

It's the first of several such blocks to be put on the market in coming months.

Afghan Minister of Mines Wahidullah Shahrani says the initial value of the project is $700 million. But the total value could be ten times that if more reserves are found and developed, and if international oil prices remain at today's levels.

It allows the Chinese firm to work oil blocks in the northeastern provinces of Sari Pul and Faryab. The area, known as the Amu Darya River Basin, was first explored by Soviet engineers in the 1960s.

Shahrani spoke at a ceremony following the signing of the deal Wednesday.