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China probe of oil and gas corruption spreads overseas

A sweeping corruption investigation into state oil giant China National Petroleum Corp (CNPC) has expanded from domestic oilfields to overseas operations, with two more oil executives being detained for questioning.
Bo Qiliang (pictured), the vice president of CNPC’s subsidiary PetroChina Company Limited, was one of those detained, sources told local English-language magazine Caixin.

PetroChina said in a statement that Bo, who was in charge of the company’s overseas operations, had left his post as vice president due to a reshuffling of positions, without giving more details.

Police raided Bo’s office and detained his secretary as well, the sources said.

Bo reportedly colluded with senior oil officials to steal state assets while leading CNPC’s aggressive acquisition of overseas assets.

He was reportedly linked to Zhou Yongkang, the retired domestic security chief and former general manager of CNPC. Sources said that Bo promoted Jia Xiaoxia, the sister of Zhou’s second wife Jia Xiaoye, to be the vice president of PetroChina’s subsidiary in Canada.

Bo’s brother was a major agent for raw materials purchases by CNPC’s overseas operations, allegedly earning some $3.2 billion annually. Bo also allocated logistics management projects to his friends in exchange for alleged kickbacks.

Another executive, Zhang Benquan, the general manager of CNPC’s Iran subsidiary, was detained in early April.

Sources said Zhang could be linked to Li Guangyuan, chairman of Sichuan Star Cable Co Ltd, a major supplier of CNPC. Li was detained last July in connection with the CNPC graft probe.

Sources: Beijing Youth Daily (北京青年报), Sohu (搜狐财经), Reuters, Caixin


Hui Zhi is the Senior Manager for Content with the China Compliance Digest, where a version of this post first appeared.

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  1. The entire state owned enterprise CNPC is corrupted to the core. Bo Qiliang's first infringement of international law and ethics was the profit from insider trading on TSE and NYSE of PetroKazakhstan, while in the middle of negotiation of CNPC's US$4.2 billion buy-out of the Canadian oil & gas company in 2005. Subsequently, CNPC has been fined by the Canadian SEC for US$7 million, and compensation of US$20 million by investors class law suit. Bo Qiliang was the President of the buy-out company PetroKazakhstan, and allegedly paying millions of bribery to Kazakhstan government officials to acquire oil and gas blocks during his tenure as president from 2005-2007. It is no surprise the CNPC overseas operation is the hot bed of corruption, directed by one prominent member of the politburo standing committee, as well as China's security chief Zhou Yongkang, who happened to be a former senior executive of CNPC.

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