"China Inks Military Deal With Iran Under Secretive 25-Year Plan"
From OilPrice, July 6:
Last August, Iran’s Foreign Minister, Mohammad Zarif, paid a visit to
his China counterpart, Wang Li, to present a roadmap on a comprehensive
25-year China-Iran strategic partnership that built upon a previous
agreement signed in 2016. Many of the key specifics of the updated
agreement were not released to the public at the time but were uncovered
by OilPrice.com at the time. Last week, at a meeting in Gilan
province, former Iran President Mahmoud Ahmadinejad alluded to some of
the secret parts of this deal in public for the first time, stating
that: “It is not valid to enter into a secret agreement with foreign
parties without considering the will of the Iranian nation and against
the interests of the country and the nation, and the Iranian nation will
not recognize it.” According to the same senior sources closely
connected to Iran’s Petroleum Ministry who originally outlined the
secret element of the 25-year deal, not only is the secret element of
that deal going ahead but China has also added in a new military
element, with enormous global security implications.
One of the
secret elements of the deal signed last year is that China will invest
US$280 billion in developing Iran’s oil, gas, and petrochemicals
sectors. This amount will be front-loaded
into the first five-year period of the new 25-year deal, and the
understanding is that further amounts will be available in each
subsequent five year period, provided that both parties agree. There
will be another US$120 billion of investment, which again can be
front-loaded into the first five-year period, for upgrading Iran’s
transport and manufacturing infrastructure, and again subject to
increase in each subsequent period should both parties agree. In
exchange for this, to begin with, Chinese companies will be given the
first option to bid on any new – or stalled or uncompleted – oil, gas,
and petrochemicals projects
in Iran. China will also be able to buy any and all oil, gas, and
petchems products at a minimum guaranteed discount of 12 per cent to the
six-month rolling mean average price of comparable benchmark products,
plus another 6 to 8 per cent of that metric for risk-adjusted
compensation. Additionally, China will be granted the right to delay
payment for up to two years and, significantly, it will be able to pay
in soft currencies that it has accrued from doing business in Africa and
the Former Soviet Union states. “Given the exchange rates involved in
converting these soft currencies into hard currencies that Iran can
obtain from its friendly Western banks, China is looking at another 8 to
12 per cent discount, which means a total discount of around 32 per
cent for China on all oil gas, and petchems purchases,” one of the Iran
sources underlined.
Another key part of the secret element to the 25-year deal is that China
will be integrally involved in the build-out of Iran’s core
infrastructure, which will be in absolute alignment with China’s key
geopolitical multi-generational project, ‘One Belt, One Road’ (OBOR). To
begin with, China intends to utilise the currently cheap labour
available in Iran to build factories that will be financed, designed,
and overseen by big Chinese manufacturing companies with identical
specifications and operations to those in China. The final manufactured
products will then be able to access Western markets through new
transport links, also planned, financed, and managed by China....
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