PetroChina says report of more probes 'inaccurate', shares rise

HONG KONG/BEIJING Mon Sep 9, 2013 3:31am EDT

1 of 2. Wang Guoliang, then CFO of PetroChina, announces company results during a news conference in Hong Kong in this March 20, 2006 file photograph.

Credit: Reuters/Bobby Yip/Files

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HONG KONG/BEIJING (Reuters) - Shares in Chinese oil producer PetroChina Co Ltd rose as much as 1.7 percent when they resumed trade on Monday, after the company said a newspaper report that more of its executives were being investigated was inaccurate.

The China Business News said five executives, including vice president Sun Longde and director Wang Guoliang, had been detained, citing an unidentified source within the company.

PetroChina is embroiled in a major corruption investigation but it said the report was inaccurate, adding that both Sun and Wang continued to work as usual.

The shares were suspended from the morning session. They rose to as high as HK$8.85, up 1.7 percent, beating a 0.8 percent gain in the benchmark Hang Seng Index.

"The fundamentals of the business are likely to see very limited impact. However, the uncertainty and the potential for a lengthy legal process to unfold is likely to be a near-term overhang on the stock performance," Andy Meng, an analyst at Morgan Stanley, said in a note.

Shares in PetroChina, one of the world's most valuable oil companies, were also suspended for a day on August 27.

Since then, the government has said five former senior executives at PetroChina and its parent, China National Petroleum Corporation (CNPC), were being investigated. That included Jiang Jiemin, the former chairman of both entities.

The four others are former CNPC vice president Wang Yongchun and three former executives at PetroChina - vice president Ran Xinquan, chief geologist Wang Daofu and board secretary Li Hualin, who was also a vice president of CNPC.

Hong Kong-listed Wison Engineering Services Co Ltd, a major PetroChina customer, said earlier this month its chairman and controlling shareholder, Hua Bangsong, was assisting authorities in an unspecified investigation.

The investigations come amid an anti-corruption campaign by Chinese President Xi Jinping.

Local media reports have said the PetroChina probe appears to be targeting people who worked in the late 1980s at the Shengli field, the country's second-largest oil field by output and located in China's eastern Shandong province.

Jiang, the highest-ranking official named in the probe, started with the company at Shengli and rose to prominence with the support of Zhou Yongkang, China's former domestic security chief, who stepped down last year from the elite Politburo Standing Committee.

Sources have told Reuters that Zhou, who spent years working in the oil industry, is helping authorities in a corruption probe but contrary to some media reports is not currently the target of the investigation.

(Additional reporting by Twinnie Siu, Donny Kwok and Fayen Wong. Editing by Dean Yates)

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