Nigeria, Others On Alert As Sinopec Plans To Trim Overseas Output By 8.4m Barrels
Countries where Sinopec Group have investments have been placed on red alert after it emerged that the Chinese firm plans to cut overseas investment by 22.2 percent this year and trim inefficient oil output abroad.
The cut are among measures to be taken in response to inspections by the country’s graft watchdog.
Chinese President Xi Jinping has warned that corruption threatens the survival of the ruling Communist Party and his two-year anti-graft campaign has brought down scores of senior officials in the party, government, military and state-owned enterprises.
As part of the campaign, the China Central Commission for Discipline Inspection (CCDI) is stepping up inspections at conglomerates owned by the central government.
Sinopec, China’s second-largest state energy group, which has investments in 27 countries including Russia, Nigeria and Iraq, planned to trim overseas output this year by 8.4 million barrels, according to a statement posted on the CCDI’s website (www.ccdi.gov.cn) detailing problems uncovered after a month-long inspection late last year.
That would be roughly 2.5 percent of total output from Sinopec Corp, the state oil group’s listed entity.
Apart from similar problems uncovered at other state-owned firms such as nepotism, big-ticket procurement without open tenders and using public funds for holidays, CCDI said some of Sinopec’s overseas investments had generated low returns or even no revenue after years of input.
The report gave no further detail on where the cuts on spending and output would be made.
The report came days after the watchdog said Wang Tianpu, a former general manager of Sinopec Group, had been put under investigation for “serious disciplinary violations”, a common euphemism for graft.