PetroChina's former Indonesia chief under investigation - sources

Reuters

By Charlie Zhu and Chen Aizhu

HONG KONG/BEIJING, Oct 16 (Reuters) - The Chinese governmentis investigating the former head of PetroChina's Indonesian operations, sources said, just weeks afterauthorities announced a corruption investigation into otherformer senior executives at the state oil giant.

PetroChina removed Wei Zhigang from his post as generalmanager of its Indonesian unit several weeks ago amid anunspecified official probe into the executive, three Chinese oilindustry sources familiar with the matter told Reuters.

Company spokesman Mao Zefeng said he was not aware of anyinvestigation into Wei, who could not be reached for comment.

PetroChina and its parent firm, China National PetroleumCorp (CNPC), are at the centre of one of the biggest corruptioninvestigations into the Chinese state sector in years. Untilnow, no executives from PetroChina's foreign operations havebeen implicated.

"The former general manager of the Indonesian business isunder investigation," said one source, who spoke on condition ofanonymity due to the sensitivity of the matter. "He has alreadybeen removed from the general manager position."

A second source added: "Wei has been removed from his joband his replacement has been sent to Indonesia."

The new country general manager is Xue Liangqing, formerly achief geologist at PetroChina's international exploration andproduction unit, the three sources said.

Asked to comment, Indonesia's energy regulator SKKMigas saidWei had to leave because his visa had been extended too manytimes for someone in that role in the country's oil sector.

Spokesman Elan Biantoro said the regulator was awarePetroChina had appointed Xue as its new general manager forIndonesia.

A corporate communications manager at PetroChina'sIndonesian unit in Jakarta said she could not provide immediatecomment.

SKKMigas has been rocked by its own corruption scandal, witha recent investigation into its former chief.

WIDESPREAD INVESTIGATION

Beijing stunned the Chinese energy industry in late Augustand early September with announcements that five former topexecutives at PetroChina and CNPC were beinginvestigated for "serious discipline violations", shorthandgenerally used to describe graft.

The executives included Jiang Jiemin, former chairman ofboth entities, and Wang Yongchun, who was vice president of CNPCin charge of China's largest oil field of Daqing in thecountry's northeast.

Authorities have given no further details on the allegedwrongdoing of the five, but the investigations suggest PresidentXi Jinping wants to tackle graft in an industry that ranks asone of the most powerful corners of China's state-ownedcorporate sector.

None of the former executives have been reachable or seen inpublic since the announcements. Top executives at severalPetroChina suppliers have also been implicated.

PetroChina's operations span the globe, from oil productionfacilities and pipelines to refineries and petrochemicalprojects. Its market capitalisation of about $235 billion makesit one of the world's most valuable oil firms.

Wei, an industry veteran, took over as head of PetroChina'sIndonesia operations in 2004, according to PetroChina.

The unit, with nearly 3,500 employees, has increased crudeoil output significantly since its incorporation in 2002, whenPetroChina bought U.S. oil firm Devon Energy's assets inSoutheast Asia's biggest economy.

PetroChina's output in Indonesia was 5.67 million tonnes in2011, roughly triple its 2002 level, making it the seventhlargest producer in the country.

PetroChina attributed the surge in part to expertise fromCNPC's oil service units, including CNPC Daqing DrillingEngineering Co, in extracting oil from mature fields, experienceaccumulated from decades operating ageing fields at home.

Last month, Reuters reported that PetroChina had tightenedcontrol over its managers and stepped up safety inspections toensure the "shock" from the corruption scandal doesn't disruptits global operations.

Controls were also tightened in case directors tried to fleeChina or were needed as part of the investigation, which hassparked shock and confusion inside PetroChina, a company with550,000 employees and 320,000 contractors.

"The atmosphere in the company remains heavy," said thesecond source.

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