A Chinese corruption probe into state-run China National Petroleum Corp. has reached into Canada and is threatening its purchase here of the Dover oilsands.
Athabasca Oil Corp., owner of the oilsands, issued a statement Monday that it is working to close the $1.23-billion deal with PetroChina, after doubt over the deal hit its stock.
Athabasca shares continued to fall Tuesday after a seven per cent drop Monday and were trading at $6.32 today, the lowest since last November.
The deal is tied up because it was negotiated by PetroChina executives who are no longer in charge of the Canadian operations.
Executives leave Canada
Both are under investigation in a corruption probe begun in 2012 that has involved hundreds of executives in state-owned firms.
Li Zhiming, who has been detained in Beijing, worked at Phoenix Energy Holdings, a subsidiary of PetroChina that bought the 40 per cent of Dover oilsands it doesn’t own from Athabasca.
The deal, part of Athabasca’s option agreement with Phoenix, was announced April 17, but has not yet closed. PetroChina is reported to be reviewing the deal.
In its statement Monday, Athabasca said “the company confirms that it continues to work with Phoenix Energy Holdings Ltd. to close the transaction in accordance with the terms of the put/call option agreement. Athabasca will update the market on material developments.”
Margaret Jia, who was recalled to Beijing by PetroChina and has faced questioning, had been its chief representative here.
Jia and Li have negotiated multiple agreements in Alberta’s oil patch.
The Wall Street Journal reports they are to be succeeded by a single executive dispatched from Beijing who is to oversee all PetroChina’s dealings in Canada.
Probe targets CNPC head
While neither Li nor Jia has been accused yet of any wrongdoing, Beijing’s corruption probe today targeted the most senior executive at China National Petroleum.
Zhou Yongkang, a former security chief and head of the state-owned company, is being investigated for “serious disciplinary violation,” code words for corruption charges, Chinese wire service Xinhua reported today.
Since President Xi Jinping came to power in China, 182,000 party officials at every level have been investigated.