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UPDATE 1-PetroChina overseas operations chief Bo Qiliang under investigation - company source
May 16, 2014 / 3:59 PM / 4 years ago

UPDATE 1-PetroChina overseas operations chief Bo Qiliang under investigation - company source

* Bo had spearheaded aggressive overseas expansion

* Probe is part of nationwide anti-corruption campaign (Adds details, quotes and background)

By Charlie Zhu and Michael Martina

BEIJING, May 16 (Reuters) - PetroChina’s overseas operations chief Bo Qiliang is under official investigation after being removed from his post, a company source told Reuters, the latest executive implicated in China’s corruption crackdown.

Earlier on Friday, PetroChina said in a filing with the Shanghai Stock Exchange that Bo had left his post as vice president due to a change in job role, but did not give a reason.

The company and its parent firm, China National Petroleum Corp (CNPC), are at the centre of one of the biggest corruption investigations in the Chinese state sector in years, launched by the government half a year ago.

The probe, part of a nationwide anti-corruption campaign led by Chinese President Xi Jinping, is still expanding and there are no signs it will end soon.

“Several days ago, we heard that he (Bo) was taken away by investigators from his home,” a company source with knowledge of the matter told Reuters on condition of anonymity.

The source added that Bo had been banned from leaving China at least a month ago.

Bo will be replaced by Lu Gongxun, the former head of PetroChina in Kazakhstan, the source said. Lu was not immediately available for comment.

Earlier on Friday, well-respected Chinese news magazine Caixin cited internal sources as saying Bo recently had been “taken away for investigation”.

PetroChina spokesman Mao Zefeng reiterated the stock exchange statement but declined to comment further to Reuters. Bo’s company biography appeared to have been removed from the firm’s website.

PetroChina is China’s dominant oil and gas producer. Its operations span the globe, from oil production facilities and pipelines to refineries and petrochemical projects. Its market capitalisation of about $210 billion makes it one of the world’s most valuable oil firms.

Bo, 51, a veteran of the company, had spearheaded its aggressive overseas expansion in the past few years. Under former chairman Jiang Jiemin, PetroChina and CNPC entered into a series of major overseas deals.

Industry sources have told Reuters that new management has realised that the firm may have been overly aggressive in some of the deals, including purchases of high-cost unconventional energy assets like oilsands and shale gas in Canada and coalbed methane projects in Australia.

Five former top executives from both PetroChina and CNPC are being investigated for “serious discipline violations”, shorthand generally used to describe corruption.

They include Jiang, who was a vocal proponent of expansion and of what he called the national and social responsibilities of state-owned enterprises.

Jiang was head of PetroChina and CNPC from late 2006 until early last year. Under his leadership, PetroChina’s capital expenditure almost doubled to 352.5 billion yuan in the five years to 2012.

President Xi launched the corruption crackdown soon after becoming the head of the ruling Communist Party late in 2012 and has made it a central pillar of his rule.

Seeking to win back public confidence in the face of a seemingly endless stream of scandals, he has said pervasive graft threatens the party’s very survival.

Xi has vowed to target powerful “tigers” as well as lowly “flies”, though some analysts say the campaign may be an effort to consolidate his power and remove opposition. (Reporting by Charlie Zhu and Michael Martina; Editing by Andrew Roche)

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