China Extends Graft Probes to PetroChina
Energy Company Says Three Senior Executives Resigned Amid Investigations
BEIJING—State-controlled PetroChina Co. said three of its senior executives are under investigation by authorities for "severe disciplinary violations" and have resigned, as Chinese authorities seem to be ratcheting up efforts to root out official corruption.
PetroChina is China's largest oil and natural-gas producer. BLOOMBERG NEWS
The disclosure by the Chinese energy company on Tuesday came a day after its state-owned parent, China National Petroleum Corp., said a fourth executive was under investigation for the same reason. PetroChina is China's largest oil and natural-gas producer.
While neither PetroChina nor its parent have released specifics of the probes, the phrase "severe disciplinary violations" is typically used by Chinese officials when investigating cases of alleged corruption.
The announcements mark the latest investigations into high-ranking officials at Chinese government agencies and state-owned enterprises, amid a campaign led by President Xi Jinping to root out official corruption. China's top leaders have acknowledged that persistent corruption and rising public concerns about graft pose a threat to the Communist Party's grip on power.
The disclosures come at a pivotal time for PetroChina, which is in the midst of pursuing two massive overseas investments in a quest to boost its earnings abroad and secure energy resources for its home country.
The company is poised to buy a stake valued at billions of dollars in one of Iraq's largest oil fields from Exxon Mobil Corp., and is a possible suitor for a $5 billion stake in an oil field in Kazakhstan held by the Kazakh government. Mr. Xi is expected to announce a number of oil and natural-gas agreements during his first trip to Central Asia next month as president, a Chinese foreign-ministry official said Tuesday.
While China's biggest state-owned companies can be opaque, their operations face increasing disclosure pressures as the companies do business outside the nation's borders. Chinese companies announced $34 billion in overseas energy deals last year, which included Cnooc Ltd.'s $15.1 billion acquisition of Canadian oil-and-gas producer Nexen Inc., according to data provider Dealogic. The Nexen transaction is China's biggest overseas acquisition to date.
Li Hualin, above in 2009, served as chairman of PetroChina unit Kunlun Energy prior to his resignation. BLOOMBERG NEWS
PetroChina identified the executives as Li Hualin, chairman of PetroChina's natural-gas-distribution unit Kunlun Energy Co. and a vice president at the parent company; Ran Xinquan, a PetroChina vice president and head of its Changqing oil field in northern China; and Wang Daofu, PetroChina's chief geologist. None of the executives were available for comment.
"The company's normal business operations are not affected," a PetroChina official said. "We will disclose relevant information in a timely manner."
The official said PetroChina's board intends to nominate Wen Qingshan, chief accountant of CNPC, as the new chairman of Kunlun. Zhang Bowen, a director at Kunlun, will perform the duties of chairman in the interim, the official said.
It isn't clear how the moves might affect PetroChina's efforts to broaden its operations in natural gas. China is looking to increase its use of the cleaner-burning fuel as part of an effort to wean itself off its dependence on coal and on oil imports. PetroChina bought control of Kunlun in 2008.
"Mr. Li was the major driving force behind [PetroChina's] transformation into the natural-gas business in the past few years," said BOCI Securities analyst Jeffrey Fang.
All three of the PetroChina officials have held executive positions there for decades, according to profiles on the company's website, which have since been taken down. Mr. Li, who joined CNPC in 1983, has been chairman of Kunlun since 2007 and was appointed PetroChina's board secretary in 2009. Under Mr. Li's leadership, shares of Kunlun have almost tripled, with the company at a current market capitalization of $13 billion.
Mr. Ran was named head of PetroChina's Changqing field in 2008 and was appointed a vice president at PetroChina in 2011. Mr. Wang was appointed chief geologist at PetroChina in 2008.
The disclosures follow the departure of Jiang Jiemin, who resigned in March after serving as PetroChina's chairman since 2007. Mr. Jiang, who also resigned as chairman of CNPC, left to become the head of the commission that oversees China's state-owned companies. That commission on Tuesday also announced the investigation into the three PetroChina executives. It didn't return calls seeking comment.
On Monday, Chinese authorities said Wang Yongchun—a CNPC vice president and head of China's largest oil field in the northeastern Daqing region—was under investigation by China's Ministry of Supervision, the country's antigraft agency. It also cited "severe disciplinary violations." Mr. Wang wasn't available for comment and CNPC declined to comment.
On Tuesday a spokesman for CNPC said Mr. Wang had been succeeded as head of the Daqing field by Liu Hongbin, who has served asone of six vice presidents of CNPC since July.
Last week, China Mobile Ltd. said a provincial head and former senior executive was being investigated by the Chinese government for the same reason cited for the four Chinese oil executives. China Mobile didn't elaborate on what violations are being investigated. The former China Mobile executive wasn't available to comment.
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