Chinese President Xi Jinping’s anti-corruption campaign against the “tigers and flies” (high- and low-ranking officials) is hurting the state-run oil and gas industry, especially CNPC, China’s biggest energy company. In shale-rich Sichuan province, so many officials have been purged that operations have slowed to a crawl or stopped entirely. Interfax has the details:
China’s largest oil and gas company has been forced to halt work at numerous drilling sites because of the number of executives detained by the graft probe, said the source, who is a third-party engineer conducting field work at shale plays in Zigong, Sichuan.
The investigation has left the remaining CNPC staff in Sichuan with virtually nothing to do. “Since there is no work, many CNPC workers have to stay at home, receiving only half of their original salary and no bonuses at all,” said the source.
“Even Shell’s foreign supervisors have all gone back to their home countries. Shell is famous for its strenuous safety checks, but I’ve seen no supervisors from Shell or CNPC come to check our work this month. Sometimes we have to work with China National Offshore Oil Corp. so that we don’t waste our time.”
Xi’s reform program has put him on track to become China’s most powerful leader in decades, but reforms this aggressive always come with the risk of creating disarray, at least in the short term. This slump in energy operations will probably be only temporary; China will do whatever it takes to ensure its energy security, and Sichuan’s extensive shale resources will be developed eventually. But Xi’s anti-corruption campaign is still a roll of the dice; he’s betting that focusing power at the center will help China weather the storms on the horizon without creating insurmountable problems of its own.