China gets approval for Afghanistan oil exploration bid

The country's cabinet approved a deal to allow China National Petroleum Corporation (CNPC) to develop oil blocks in the Amu Darya Basin.

The basin is estimated to hold around 87 million barrels of oil.

The deal comes as China is looking to expand its oil resources in wake of a growing domestic demand.

"The Afghan cabinet has ordered mines minister Wahidullah Shahrani to sign an oil exploration contract for Amu Darya with China National Petroleum Corporation," Afghanistan president's office said in a statement.

'Taking a punt'

The state-owned CNPC will carry out the oil exploration and extraction with a local partner, the Watan Group.

While there has been a lot of talk about the potential of natural resources in Afghanistan, analysts said that it was too early to predict the profitability of the venture.

"To a certain extent they are taking a punt," Tony Regan of Tri-Zen, a Singapore-based consultancy, told the BBC.

Mr Regan explained that CNPC will have to spend a considerable amount of money to explore the basin before it can actually find out about the amount of oil that may exist there; Kazinform cites BBC.

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