China Bids for Big Oil and Nuclear Technology Contracts in Iran

There is a lot going on between China and Iran. Much of it has happened almost unnoticed because of the furor over Tehran’s underhand nuclear activities. DEBKA-NetWeekly’s intelligence sources report exclusively that Beijing has marked Tehran as a top strategic target of its oil and foreign policies. Substantial Chinese investments are in the planning for Iran’s oil and nuclear industries. The Islamic republic for its part is eyeing expanded Chinese technological input to extend the range of its Shehab-4 surface missile as far as Europe.

A Chinese delegation is due soon in Tehran to negotiate contracts for upgrading the obsolete equipment of Iran’s oil fields and the construction of 18-20 small nuclear reactors. Many billions of dollars in credit on exceptionally easy terms will be offered the clerical rulers of Iran.

Beijing’s new Iranian orientation arose out of three developments:

  1. Iran is on the point of issuing tenders for renovating its outdated oil field equipment.
  2. Tehran has also prepared tenders for the construction of a network of atomic reactors across the country.
  3. Iran has decided against awarding Russia any more reactor contracts after Busheir for three reasons: It regards Russian technology as backward; Moscow does not meet its timetables for delivery; and, finally, Moscow’s bonds with Washington are believed to run deeper than is readily apparent.

The Chinese believe that if they rush the Iranians off their feet with lavish financial credit terms for modernizing the oilfields, they will also snag the nuclear contracts.

DEBKA-Net-Weekly’s Tehran sources note another large carrot Beijing is dangling for Tehran, namely, stepped up cooperation in developing long-range surface missiles. Teamwork is already substantial, but China has more technological extras up its sleeve that could speed Iran towards its objective of extending the range of its missiles to Europe – and even as far as the American East Coast.


Buying up technology on three continents


The Islamic republic’s missile industry has spread its purchases of technology far and wide, buying from North Korea, Russia, Ukraine, Brazil as well as longstanding ties with China. According to our military sources, Tehran is now hell bent on developing the Shehab-4, which differs from the Shehab-3 in many respects, to a range of 5,000 km that covers Paris and London.

During their spring tests with solid fuel, Iran’s missile experts were unable to overcome two problems: the ignition and the guidance system. They turned for advice to Germany companies.

The nature and origin of the Shehab-4 is the subject of speculation in the West. Some experts say it is a replica of the North Korean Nodang-2; others that it derives from another North Korean missile, the Taepodong. Both were sired by the Russian SS-4 – especially all their guidance systems. This provenance produced the British charge leveled this week – during the London-Tehran spat over alleged British intelligence involvement in two bomb blasts in Iranian Khuzestan – that Russian military experts were helping Iran develop the Shehab-4.

The charge is groundless. The truth is that Iran obtained the relevant Russian missile technology from Chinese firms. Those firms acquired the know-how from Russia in the 1980s mainly by its spy networks laying out heavy bribes.

Today, there is no argument among Western experts that Tehran obtained its missile technology from a Chinese firm called Phaanxi, whose 4th Department deals in missile system research. DEBKA-Net-Weekly‘s military sources disclose that Chinese experts are now helping iron out the guidance system fault. They belong to the Shanghai-based Air and Space Academy and their services come at exorbitant cost. Since the beginning of this year, one of its top experts has been in Iran working with local missile engineers on the recalcitrant element. The fact that they still have not brought the missile to its testing stage indicates that both teams still have their work cut out for them.


Putin to Rice: You’ve got the wrong address


Chinese assistance in the development of Iran’s long-range surface missiles most certainly came up in the US defense secretary Donald Rumsfeld’s talks with the Chinese defense minister Cao Gangchuan in Beijing this week. It also figured in US secretary of state Condoleezza Rice‘s Kremlin meeting with Russian president Vladimir Putin and foreign minister Seregy Lavrov, in the context of Russian support for Iran’s nuclear industry.

According to our Moscow sources, Putin protested to his American guest that Washington had the wrong address; instead of complaining to Moscow, it should talk to Beijing which was giving Tehran most of its know how for extending the reach of its missiles.

The Shehab missile testing site is located in southeastern Iran near Semnan. This is where the Iranians test their Oghab (Eagle) artillery rocket system, which too was developed with Chinese help, as were the other Iranian rocket launching systems, Shain, Zelzal, Naze’at and Fajr.

Thanks to input from China’s Great Wall Industries, the Iranians overcame one of the Shehab’s guidance systems, that of its telemetry.

The component parts of the Shehab-4 are manufactured at a site called Bagh-Melli (National Park) in the southeastern suburbs of Tehran, not far from the giant military complex of Parchin. Most of the production lines are underground. A second set of lines has been buried beneath the first layer in order to keep production moving in case of an enemy attack.

The missile’s laser systems Tehran purchased from a Russian mafia network which maintains a front office in Moscow under the name of Polius and a secret production unit in the Crimea.

In their efforts to master the guidance system’s faults, Iran established a private straw company under the name of Iran Argham (Iranian Digits), with premises at 252 Takht-e Jamshid St., Tehran. This firm found one element of the missing technology from German companies.


No date yet for Shehab-4 test


The national missile industry’s planning and development programs are directed by the Revolutionary Guards aviation industry in conjunction with the Jehad-e Khod-Kafai (The Jehad for Self-Sufficiency) institution.

The latter is the live wire for missile production. The project’s director is a Revolutionary Guards colonel called Akbar Goudarzi, who is looked up to as a genius in missile science. Aged 43, he lost a finger in the Iran-Iraq war of the 1980s. Goudarzi has a doctor’s degree from Tehran’s Sharin Polytechnic University. In the years 1998 and 1999, he traveled to China twice for six-month periods to complete his studies at the missile and artillery center of Shanghai University.

Iran has also established exchange programs with Brazil and India. With Brazil, Tehran collaborates mainly on rockets for launching satellites. This program is also the source of data for Shehab-4 development.

The big question now is: when will the Shehab-4 become operational.

Thus far, the Iranian missile is far from attaining the 5,000km range to which its masters aspire. According to DEBKA-Net-Weekly‘s military experts, the Shehab-4 is capable of no more than 2,000km at this point, its effective range 1,800 or 1,900 km. A date for testing has been set tentatively for June 2006, but our sources believe that more delays lie ahead.

According to the data reaching our experts, Iran may realistically look forward to making the Shehab-4 operational in two or three years, round about 2008. But even if it achieves the desired range, there is still the problem of a warhead delivery system to be solved. On this item, little progress has been made. The program’s most significant breakthrough this year, one which raised jitters in the West and Israel, was the attainment of a solid fuel capability, which makes the missile hard to detect and destroy before its launch.

Iran’s Supreme Ruler Ayatollah Ali Khamenei told university heads and students Sunday, October 16: “Iran will defeat the world hegemony with the weapon of science.” He did not elaborate on whether the weapon he referred to was the long-range missile or a nuclear bomb – or both.

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