Date
15 December 2017
CNPC has failed to conduct opening bidding for several projects and procurements at its Fushun unit, worth a combined 26 billion yuan. Photo: Reuters
CNPC has failed to conduct opening bidding for several projects and procurements at its Fushun unit, worth a combined 26 billion yuan. Photo: Reuters

Govt audit uncovers massive irregularities at CNPC Fushun unit

China National Petroleum Corp., the nation’s biggest oil and gas producer, has failed to conduct open bidding for several projects and procurements at its Fushun unit, worth a combined 26 billion yuan (US$4.17 billion), from November 2006 to July 2013, China News Service reported Friday, citing results of a government audit.

The group also under-reported its 2012 profit by 603 million yuan as a result of accounting errors, a National Audit Office report showed.

The audit found that the financial results of five units have not been consolidated into the group’s financial statement for the same year, including 513 million yuan of assets, 220 million yuan of liabilities and 293 million yuan of equity, according to the NAO statement.

The oil giant also failed to develop a natural gas project and achieve the production guidance in Sichuan on time after obtaining government approval. And its 2.1 billion yuan gas storage project in northeast China’s Liaohe Oilfield in 2011 has been built without permission, according to the statement.

“The audit shows that CNPC has problems in areas such as operations and internal management, and some management staff may have violated laws and regulations. We have submitted our findings on violations to related departments for further investigation,” the auditor said in the statement.

A CNPC unit in Jinzhou has started construction of a gas project without securing approval from proper authorities. The project has an investment of 6.86 million yuan as of June 2013, the report said.

Between 2009 and 2012, a property subsidiary at the Fushun unit used land that has already been reclaimed by the local government to obtain financing of 250 million yuan.

The state auditor also issued reports on nine other state-owned companies, revealing cases of misconduct and irregularities in these enterprises, the report said.

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