Posts tagged ‘China National Petroleum Corporation’

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14/04/2015

Why the Trial of Former Chinese Oil Executive Jiang Jiemin Matters – China Real Time Report – WSJ

A court in central China’s Hubei province today began hearing the case of Jiang Jiemin, the former chairman of China’s biggest oil company who also briefly headed a government commission that oversees state-owned firms.

Though Mr. Jiang may not be a household name, his trial marks the most senior-level prosecution of a Communist Party official in President Xi Jinping’s anticorruption drive, which has targeted both large state industries and their political backers over the past two years.

Far more important than his past role as head of the State-owned Assets Supervision and Administration Commission was Mr. Jiang’s previous tenure as chairman of China National Petroleum Corp. Following his appointment to that role in 2011, CNPC’s revenue rose, and it grew to rival Exxon Mobil Corp. in total market value.

Mr. Jiang was tapped to head Sasac in 2013, just as several other oil-company executives were becoming ensnared in corruption allegations or disappeared from view.

While Sasac oversees state-owned companies, in practice analysts say it is weaker than the larger, clout-wielding companies it supervises.

Mr. Jiang’s trial is being closely watched in part to see if it yields any details about the circumstances surrounding the downfall of Zhou Yongkang, the country’s granite-faced former security chief, who was formally charged with bribery and abuse of power earlier this month. Mr. Jiang had risen through the ranks of the country’s oil industry under Mr. Zhou.

It is also being watched for further details of corruption investigations involving other politicians and officials in the country’s oil industry, a key target for Mr. Xi’s campaign. The trial began at 8:30 a.m. Monday and was announced in a brief notice on the Hubei Hanjiang Intermediate People’s Court Weibo account. Without elaborating, the court said Mr. Jiang faces charges in connection to bribe-taking, holding a large amount of property that came from unidentified sources and abuse of power.

The court said Mr. Jiang has a lawyer and didn’t object to the charges that include taking bribes, holding assets from unexplained sources and abusing his power.

Like Mr. Jiang, Mr. Zhou had previously served as the head of CNPC. A wide network of Mr. Zhou’s acquaintances and family members have been caught up in a far-flung investigation involving deals in areas where Mr. Zhou oversaw power, involving deals worth tens of millions or more.

Officials of Mr. Zhou’s standing have traditionally been considered off limits, but under Mr. Xi, that is changing.

Mr. Zhou is expected to face trial as are other associates, including Li Chuncheng, former deputy party secretary of Sichuan, who worked under Mr. Zhou from 1999-2002

via Why the Trial of Former Chinese Oil Executive Jiang Jiemin Matters – China Real Time Report – WSJ.

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10/04/2015

Opinion polls: The critical masses | The Economist

IN RECENT weeks official media have published a flurry of opinion polls. One in China Daily showed that most people in the coastal cities of Shanghai and Guangzhou think that smog is getting worse. Another noted the high salary expectations of university students. Yet another found that over two-thirds of respondents in Henan province in central China regard local officials as inefficient and neglectful of their duties. For decades the Communist Party has claimed to embody and express the will of the masses. Now it is increasingly seeking to measure that will—and let it shape at least some of the party’s policies.

Since the party seized power in 1949 it has repeatedly unleashed public opinion only to suppress it with force, from the “Hundred Flowers Campaign” in 1956, when it briefly tolerated critical voices, to the student-led protests in Tiananmen Square in 1989. For the past two decades, the party has effectively bought people’s obedience by promising—and delivering—a better, richer future. This will be tougher in the years ahead as the economy slows. Members of a huge new middle class are demanding more from their government in areas ranging from the environment to the protection of property rights. So the party must respond to concerns in order to retain its legitimacy.

Xi Jinping, who took over as China’s leader in 2012, has shown even less inclination than his predecessors to let citizens express their preferences through the ballot box. Yet the public has become ever more vocal on a wide variety of issues—online, through protests, and increasingly via responses to opinion polls and government-arranged consultations over the introduction of some new laws. The party monitors this clamour to detect possible flashpoints, and it frequently censors dissent. But the government is also consulting people, through opinion polls that try to establish their views on some of the big issues of the day as well as on specific policies. Its main aim is to devise ways to keep citizens as happy as possible in their daily lives. It avoids stickier subjects such as political reform or human rights. But people are undoubtedly gaining a stronger voice.

via Opinion polls: The critical masses | The Economist.

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08/04/2015

Learning Mandarin in the tundra – Russia invites China into oil business | Reuters

Russia‘s freezing north has never been the most welcoming place for foreign travelers, and its onshore oil riches have always been state secrets. But when the order comes from the Kremlin to open up, people obey.

Pipelines to be laid to transport oil to Vankor are seen at the Rosneft company owned Suzunskoye oil field, north from the Russian Siberian city of Krasnoyarsk, March 26, 2015. REUTERS/Sergei Karpukhin

Last September, President Vladimir Putin, who has been seeking new markets in Asia for Russian energy exports to replace traditional customers in Europe, announced that he would welcome Chinese investment in Vankor, a vast new oil field in remote eastern Siberia owned by state firm Rosneft.

Since then, delegations from both China and India have been flown out to visit the field in the remote tundra.

Some of the workers, who spend four weeks at a time at the isolated station – where temperatures can fall as low as minus 60 Celcius (minus 76 Fahrenheit) – have duly taken up Mandarin.

“No problem. We will work with the Chinese workers if need be,” said Alexei Zyryanov, deputy head of an oil and gas production unit.

All of Vankor’s output of 440,000 barrels per day of crude is already shipped east, via the East Siberia-Pacific Ocean pipeline, which includes a spur feeding China’s northeast.

But a proposed Chinese investment in a stake in the project would go far further than Moscow has ever gone before to luring Beijing into its hydrocarbon industry.

Rarely has Moscow considered offering an ownership stake in such a big strategic onshore deposit to outsiders, despite decades of interest from Western majors. The offer is the more remarkable for being made to China, a rival for decades with which Russia nearly went to war in the 1960s over a border dispute.

Rosneft confirmed that it has reached a draft agreement to sell a 10 percent stake in Vankor to China.

via Learning Mandarin in the tundra – Russia invites China into oil business | Reuters.

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07/04/2015

Zhou Yongkang Charges Come As Xi Jinping’s Anti-Corruption Campaign Hits Snags – China Real Time Report – WSJ

Former Chinese security czar Zhou Yongkang has now been formally charged with bribery and abuse of power, in what appears to be yet another triumph in President Xi Jinping’s strategy to go after “tigers and flies”— in Chinese political parlance, both senior leaders and junior officials.

By all accounts, the hunting and the swatting have been a major success for Xi. The effort appears to be both popular and effective. For Xi, it has the added benefit of consolidating his political command.

That’s the good news.

But Zhou’s prosecution is coming at an important moment for the anticorruption campaign. A number of signs suggest that Xi’s strategy is beginning to show its age. Specifically, it appears Xi and his supporters are having an increasingly difficult time selling the idea that Beijing’s current approach is successfully rooting out the corruption that too often plagues Chinese politics.

First, there’s the fall-off in high-profile news coverage of cadres caught being bad. China’s state-controlled media still runs stories of officials who are being investigated for possible criminal conduct, as with allegations of bribery in the Chongqing city works department and claims of graft committed by a deputy director at the main television network in Anhui province.  But the focus in recent weeks has been on the identification and extradition of allegedly corrupt Chinese officials who have fled overseas. By broadcasting about those who are hiding abroad, Beijing is trying to pivot away from the persistence of graft at home. Indeed, the more cadres that are caught in-country, the more intractable the problem of corruption has to appear.

Then there’s the growing coverage in China’s state media of “maintaining political discipline”—code words for both party unity and getting cadres to conduct themselves according to rules and regulations set by the leadership.  That emphasis underscores the alternative view of some Communist party members that Beijing should rethink the way it trains and promotes cadres, rather than constantly supervising and occasionally punishing them. This conversation is taking place across major party publications, illustrating indecision in some quarters about which weapons the government should be wielding in the war on graft.

Xi’s supporters have also been forced on the defensive by the argument that the anticorruption campaign is having a deleterious effect on an already slowing national economy.  A recent essay that appeared in the Communist party’s flagship newspaper People’s Daily and various affiliated outlets argued that this “misconception needed clarification,” and went on to insist that “the anticorruption effort isn’t an obstacle but a way to smooth the path of economic development by removing inefficiencies and thereby provide positive energy,” especially in the realm of public opinion.

Even anticorruption czar Wang Qishan has had to come out in the past few days to defend the effort to go after “tigers and flies,” urging more grassroots efforts to identify corrupt officials and asking for patience from the public and fellow party members because, he insisted, “changing the political ethos is not achieved overnight.”

If Xi and his allies were in complete control of the anticorruption narrative, there’d be little need to have to counter criticism of Beijing’s current strategy.

It isn’t clear how this announcement about Zhou will end up playing out in the party ranks. If the formal charges against Zhou help to revitalize Xi’s anticorruption campaign, the strategy of striking hard will reinforce the sense that Xi is still on the right path. But to some cadres who want more accountability and party reform instead of political revenge, it may read like old news.

via Zhou Yongkang Charges Come As Xi Jinping’s Anti-Corruption Campaign Hits Snags – China Real Time Report – WSJ.

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21/11/2014

China Stocks Up on Oil While It’s Cheap; Tanker Companies Profit – Businessweek

With oil prices off about 30 percent since June, China is importing record amounts of crude to build up a strategic reserve. Cheap fuel is giving tanker companies their best profits in years.

via China Stocks Up on Oil While It’s Cheap; Tanker Companies Profit – Businessweek.

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25/05/2014

China and Russia: Best frenemies | The Economist

ON MAY 21st, after a nail-biting session of late-night brinkmanship, China and Russia signed an enormous gas deal worth, at a guess, around $400 billion. Their agreement calls for Russia’s government-controlled Gazprom to supply state-owned China National Petroleum Corporation with up to 38 billion cubic metres of gas a year between 2018 and 2048. The deal capped a two-day visit to China by the Russian president, Vladimir Putin, that included a regional-security summit and joint military exercises off the Chinese coast.

Mr Putin called the deal the biggest in the history of Russia’s gas industry. But it counts, too, for the geopolitics that underpin it. That an agreement should come now, after a decade of haggling, is no accident. The deal will help the Kremlin reduce Russia’s reliance on gas exports to Europe. It is proof that Mr Putin has allies when he seeks to blunt Western sanctions over Ukraine. Both Russia and China want to assert themselves as regional powers. Both have increasingly strained relations with America, which they accuse of holding them back. Just over 40 years ago Richard Nixon and Henry Kissinger persuaded China to turn against the Soviet Union and ally with America. Does today’s collaboration between Russia and China amount to a renewal of the alliance against America?

That is surely the impression Mr Putin wants to create. Ahead of his visit he gushed to Chinese media, saying their country was “Russia’s reliable friend”. Co-operation, he said, is at its “highest level in all its centuries-long history”. From the Chinese side, Xi Jinping chose Russia as the first country he visited on becoming president in 2013.

Commercial ties are growing. China is Russia’s largest single trading partner, with bilateral flows of $90 billion in 2013. Even before the gas deal, the two sides hoped to double that by 2020. If Western banks become more reluctant to extend new loans, financing from China could help Russia fill the gap. China badly needs the natural resources which Russia has in abundance. The gas deal will ease China’s concerns that most of its fuel supplies come through the strategic chokepoint of the Strait of Malacca, and will also enable China to move away from burning so much of the coal that pollutes the air in Chinese cities.

The two have also made common cause in geopolitics. China abstained from a UN security council vote in March that would have rejected a referendum that Russia backed in Crimea before it annexed it. China has also joined Russia in vetoing UN attempts to sanction the regime of Bashar Assad fighting a civil war in Syria. The two have taken similar stances over issues such as Iran’s nuclear programme.

China and Russia share a strong sense of their own historical greatness, now thwarted, as they see it, by American bullying. Both want the freedom to do as they please in their own back yards. Russia’s annexation of Crimea and its manoeuvring in eastern Ukraine have vexed America and Europe and left Mr Putin with even fewer friends than before. China’s push into the East and South China Seas is causing similar concerns in Asia, as smaller neighbours worry about its expansionism.

But the West should not panic. Despite all this, Russia and China will struggle to overcome some fundamental differences. Start with the evidence of the gas deal itself: the fact that it took ten years to do, and that the deal was announced at the last minute, suggests how hard it was to reach agreement. The Chinese were rumoured to have driven a hard bargain, knowing that Mr Putin was desperate to have something to show from his trip.

More a grimace than a smile

In this deal, as elsewhere in the relationship, China has the upper hand. Other supplies of gas are coming online in Australia and Central Asia. And whereas China’s global power is growing, Russia is in decline—corroded by corruption and unable to diversify its economy away from natural resources. The Chinese government will expect the Kremlin to recognise this historic shift—a recipe for Chinese impatience and Russian resentment. Although the two countries are united against America, they also need it for its market and as a stabilising influence. And they are tussling for influence in Central Asia. Their vast common border is a constant source of mistrust—the Russian side sparsely populated and stuffed with commodities, the Chinese side full of people. That is why many of Russia’s tactical nuclear weapons are pointed at China (see article). In the long run, Russia and China are just as likely to fall out as to form a firm alliance. That is an even more alarming prospect.

via China and Russia: Best frenemies | The Economist.

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05/02/2014

China’s Oil Pipeline Through Myanmar Brings Energy—and Resentment – Businessweek

Until recently, 80 percent of China’s oil and gas imports were transported by ship through a narrow waterway separating Indonesia and Malaysia, known as the Strait of Malacca. The possibility that hostile forces could one day block that crucial passageway and starve the country of energy has long made China’s leaders nervous.

Oil and gas pipeline

Oil and gas pipeline (Photo credit: Wikipedia)

In 2009, two state-owned energy giants inked a $2.5 billion agreement to loosen the pinch: China National Petroleum and Myanmar Oil & Gas Enterprise agreed to lay down more than 500 miles of oil and gas pipelines from Myanmar’s western coast to China’s southwestern Yunnan province. When the oil pipeline goes online later this year, tankers carrying crude from the Middle East and Africa will be able to dock at Myanmar’s port of Kyaukpyu and send as many as 440,000 barrels of oil a day overland to China. Industry news service Platts (MHFI) reports that the oil pipeline is 75 percent complete and should be operational by June.

A parallel gas pipeline went into operation last July, capable of transporting as much as 12 billion cubic meters of natural gas per year across Myanmar to China. “China’s piped gas is mainly imported from areas around the Malacca Strait,” Lin Boqiang, a professor with the China Center for Energy Economics Research at Xiamen University, told the state-run Global Times. “Now we have one more pipeline from the land instead of the seabed, which will decrease” China’s energy vulnerability.

via China’s Oil Pipeline Through Myanmar Brings Energy—and Resentment – Businessweek.

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08/09/2013

A Chinese power struggle: Hunting tigers

The Economist: “A DRIVE against corruption? Or a political purge? Or a bit of both? Outside China, not many people noticed the dismissal of Jiang Jiemin, the minister overseeing China’s powerful state-owned enterprises (SOEs). His charge—“serious violations of discipline”—is party-speak for corruption. Officials at CNPC, a state-run oil giant which Mr Jiang used to run, have also been charged. But in Beijing it fits a pattern. It follows on from the trial of Bo Xilai, the princeling who ran the huge region of Chongqing and was a notable rival of Xi Jinping, China’s president. Mr Xi now seems to be gunning for an even bigger beast: Zhou Yongkang, Mr Jiang’s mentor, an ally of Mr Bo’s, and until last year the head of internal security whom Mr Bo once hoped to replace.

Mr Xi vows to fight corrupt officials large and small—“tigers” and “flies” as he puts it. He has certainly made as much or more noise about graft as his predecessors. If Mr Zhou is pursued for corruption, it will break an unwritten rule that the standing committee should not go after its own members, past or present. And there are good reasons for Mr Xi to stamp out corruption. He knows that ill-gotten wealth is, to many ordinary people, the chief mark against the party. It also undermines the state’s economic power.

But this corruption drive is also open to another interpretation. To begin with, the tigers being rounded up are Mr Xi’s enemies. Mr Bo had hoped to use Chongqing as the springboard to the Politburo’s standing committee. The verdict on Mr Bo, expected any day, is a foregone conclusion. His sentence will be decided at the highest levels of the Communist Party, and it can only be harsh. Party politics, as seen by its players, is an all-or-nothing game, and the stakes are even higher when family prestige and fortunes are at stake.

Mr Xi is also open to the charge of being selective about leaving other tigers untouched. His own family’s fortune, piggy-banking off Mr Xi’s career, runs into hundreds of millions of dollars. Even as Mr Xi rails against corruption, he has overseen a crackdown on reformers calling, among other things, for the assets of senior cadres to be disclosed. And although the party makes much of how Mr Bo’s trial is the rule of law at work, many of the moves against Mr Bo, Mr Jiang and Mr Zhou appear to be taking place in a parallel and obscure system of detention for party members known as shuanggui.

Now set out your stall, Mr Xi

So China is entering a crucial period. The optimistic interpretation of all this is that Mr Xi is not just consolidating his own power but also restoring political unity. This will free him to push ahead with the deep but difficult economic reforms that he has promised and that China so badly needs if growth is not to stumble; it would also allow him to drive harder against corruption. The SOEs are bound to be part of both campaigns.

The test will come at a party plenum in November. There, Mr Xi should make it clear that even his friends are not above the law. A register of official interests would be laudable, and a few trials of people from Mr Xi’s own camp would send a message. He should also tie his campaign against graft to economic liberalisation: break up the various boondoggles and monopolies, and there will be far fewer chances for theft. It is still not clear whether Mr Xi’s “Chinese Dream” is a commitment to reform or maintaining the status quo. For China’s sake, it had better be reform.

via A Chinese power struggle: Hunting tigers | The Economist.

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07/09/2013

China’s Sinopec to produce cleaner gasoline from October

Reuters: “China‘s Sinopec Corp will produce lower sulfur gasoline from October, three months ahead of an official mandate, as part of a national effort to clear up the smoggy air of Chinese cities.

Except for two subsidiary plants that are undergoing maintenance, the top Asian refiner will cut sulfur in all its gasoline production from 150 parts per million (ppm) to 50 ppm from October 1, a company official said.

The new standard, national IV, is similar to Euro IV.

China, the world’s second-largest oil consumer that burns roughly two million barrels per day of gasoline, rolled out in 2011 the national IV standard for gasoline and set a January 2014 deadline to make it applicable nationally.

Despite slowing economic growth, Chinese demand for gasoline has expanded much faster than diesel this year, thanks to strong growth in car sales.

Subsidiary plants in Fujian and Hainan will move to the new grade in November after overhauls, the company official said.”

via China’s Sinopec to produce cleaner gasoline from October | Reuters.

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01/09/2013

Jiang Jiemin: China corruption probe into top official

There are increasing signs that this time, anti-corruption is being taken very seriously by the Party and government.

BBC: “Chinese authorities have announced a corruption investigation into Jiang Jiemin, the head of the commission that oversees state-owned companies.

File picture of Jiang Jiemin

The supervision ministry said Mr Jiang was suspected of a “serious violation of discipline”. He has not publicly commented on the allegations.

The term is used to refer to corruption by managers of state companies.

President Xi Jinping has vowed to eradicate corruption in China, warning that it threatens the Communist Party.

Recent months have seen several high-profile corruption cases against high-ranking officials, including disgraced senior party official Bo Xilai, who was put on trial for bribery, embezzlement and abuse of power in August.

The verdict in his case is expected “at a date to be decided”. Mr Bo denies all charges.

Until March Mr Jiang was head of the China National Petroleum Corporation (CNPC), which has faced a number of corruption allegations.

Last week it was announced that another four CNPC executives were under investigation for corruption.

Earlier in August the general manager of state-owned phone company China Mobile Ltd was detained in the southern province of Guangdong. He too is being investigated for discipline violations.

Internet users are also increasingly pursuing those perceived as having done wrong through online exposes and campaigns.

But in recent weeks there have been signs that this has worried the authorities, with a number of journalists arrested for “rumour-mongering” and a high-profile blogger arrested.”

via BBC News – Jiang Jiemin: China corruption probe into top official.

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