News / Asia

China’s 'Corruption Crackdown' Nabs State Oil Chief

Maria das Gracas Silva Foster (L), CEO of Brazil's state oil company Petrobras, greets Bo Qiliang, President of CNODC, during a signing ceremony for the First Contract of Brazilian Pre-Salt, attended by Brazil President Dilma Rousseff, ministers and repre
Maria das Gracas Silva Foster (L), CEO of Brazil's state oil company Petrobras, greets Bo Qiliang, President of CNODC, during a signing ceremony for the First Contract of Brazilian Pre-Salt, attended by Brazil President Dilma Rousseff, ministers and repre
Chinese President Xi Jinping’s ongoing “corruption” crackdown has now nabbed a major state oil corporation senior official. 

PetroChina Company Limited Vice President Bo Qiliang has been removed from his position and detained by authorities, who have prevented him from leaving the country.  Bo’s secretary has also been held in the probe.
Bo, who headed overseas operations for PetroChina, a subsidiary of CNPC, the China National Petroleum Corporation, is reported by the anti-corruption news portal FCPABlog to be under investigation for colluding with other senior Chinese oil executives to steal state assets.

The identity and nature of those assets, however, have yet to be publicly revealed.
The 52-year-old native of Shandong joined CNPC shortly after his 1983 university graduation.  After CNPC acquired the PK oilfield in Kazakhstan in 2005, Bo was put in charge of that operation.

There are published allegations that during his two years heading PetroKazakhstan, he paid substantial bribes to Kazakh government officials to enlarge the company’s holdings.
Interestingly, Reuters reports that Bo’s replacement at PetroChina is Lu Gongxun, who formerly headed PetroChina’s Kazakhstan operation.
The government’s “Central Discipline Inspection Division” probe into PetroChina has already swept up a number of other officials, including the detention in April of Foreign Cooperation Department General Manager Yan Cunzhang. Former PetroChina Chief Geologist Wang Daofu has also been put under investigation.
China analyst Edward Schwarck at the British research organization Royal United Services Institute (RUSI) says the corruption focus on PetroChina is about profits as well as integrity.
“PetroChina,” which is one of the country’s three major oil companies, is “the worst performing among them by a considerable margin,” Schwarck said.

“Investigations into PetroChina executives over the past year,” he said, “suggest that Beijing sees corruption as having contributed to the company’s business failings.

The anti-corruption campaign in PetroChina is probably part of a broader drive to make the company more profitable and efficient.”
The Guangzhou-based 21st Century Business Herald says that more than 120 officials from CNPC and its subsidiaries have been put under investigation for alleged corruption.

Caixin, a Beijing based business website, says at least 45 people have been collared by authorities relative to CNPC-connected dealings.

Caixin quotes an unidentified official as saying “in addition to the names of corrupt officials that have been made public, many others are also implicated, notably those in charge of the company’s business dealings.”
To a number of observers, the probe into PetroChina and its CNPC parent also has a strong political component – the drive by President Xi Jinping to suppress any rivals.

These analysts point to the ongoing and ever-tightening spiral of investigation into former domestic security chief Zhou Yongkang.  Zhou headed CNPC in the 1990s and that, along with his position as Sichuan Communist Party chief, propelled himself into China’s all-powerful Politburo Standing Committee.
In May 2012, General Ruan Zhibo died unexpectedly and Hong Kong-based Waican News asserted he was murdered on Zhou’s orders, reportedly because the general had knowledge that Zhou and Chongqing Communist Party Boss Bo Xilai, now imprisoned, were allegedly plotting a political coup against President Xi and his circle.
While Zhou has not been hit yet with official corruption charges, those associated with him have been targeted, investigated, and in some cases, taken into custody. Earlier this year, members of Zhou’s immediate family and close associates had a total of $14.5 billion in assets seized.
Several weeks ago, suspected Zhou ally Liu Han, a Sichuan mining magnate, was convicted of heading a 38-member crime gang and sentenced to death.  So was his brother, Liu Yong.
“I think what’s happening is that Xi Jinping [and anti-corruption boss] Wang Qishan want to establish a harsh precedent,” Chinese University of Hong Kong researcher Willy Lam told Reuters.

Lam said the death sentences were intended “to make people afraid, in a sense, to have a deterrence impact on corrupt officials.”
If Zhou is formally charged, he would be the highest ranking Chinese official to be hit with corruption charges.

But a number of analysts express doubt that authorities want to put someone once in the Politburo on trial because it would weaken the perceived invincibility of that institution, and, perhaps, draw too much attention to its other members.
“It is still unclear whether Zhou himself will be prosecuted, but the purging of his former allies,” Schwarck said, “is still important in sending a message that obstructive interest groups [those who stand against President Xi] in industry and politics will not be tolerated.”

Jeffrey Young

Jeffrey Young came to the “Corruption” beat after years of doing news analysis, primarily on global strategic issues such as nuclear proliferation.  During most of 2013, he was on special assignment in Baghdad and elsewhere with the Special Inspector General for Iraq Reconstruction (SIGIR).  Previous VOA activities include VOA-TV, where he created the “How America Works” and “How America Elects” series, and the “Focus” news analysis unit.

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