The Afghan government and China National Petroleum Corporation (CNPC) inked an agreement?on Wednesday after the China's state-owned firm won the country's first oilfield bidding.

"According to agreement signed with the CNPC today, the ( Chinese company) is to explore and extract the Amu Darya River Basin oil deposits or Amu Darya River Oil Zone in the northern Afghanistan and will start producing oil in the next two years," Afghan Minister for Mines Waheedullah Shahrani told newsman before clinching the agreement.

Shahrani and Lu Gongxun, the general director of CNPC, inked the agreement on behalf of the two sides here in government media and information center in Kabul.

"I am very glad to attend this ceremony for the energy cooperation between CNPC and Afghanistan's ministry of mining which is the symbol of bilateral energy cooperation," Lu said in the event.

According to the agreement, the CNPC will launched a joint project with local partner the Watan Group.

Under the contract, the CNPC agreed to pay a 15 percent royalty in oil itself, a 20 percent corporate tax and Afghanistan would have a share of 70 percent in the profit proceeds.