Chinese state oil major Sinopec has suspended the two top officials at its trading arm Unipec after the company suffered losses, sources with knowledge of the matter said on Thursday (Dec 27).
Unipec’s President Chen Bo, an industry veteran who helped the company become one of the world’s largest oil traders, has been suspended along with the senior Communist Party representative at the company, Zhan Qi, said five sources, who asked not to be identified due to the sensitivity of the issue.
“The government inspectors were looking into the company’s operations for the past few years … one of the problems they found was the severe trading losses in the second half of this year because of wrong market judgment,” one of the sources said.
A spokesman at Sinopec, Asia’s largest oil refiner, said in an emailed statement that Chen and Zhan have been suspended from their duties due to work-related reasons and that Deputy General Manager Chen Gang has been appointed to handle the company’s administrative work. Unipec operates as per normal, he said.
Benchmark Brent and West Texas Intermediate (WTI) oil prices have fallen by about 40% since hitting their highest in four years in October, amid oversupply concerns as major producers ramped up output while the United States unexpectedly issued waivers that allowed countries to continue importing Iranian oil despite sanctions.
A sudden widening of WTI’s spread with Brent earlier this year also led to hefty losses at major traders.
Chen Bo, who rose through the ranks to take on Unipec’s top role, started the company’s liquefied natural gas (LNG) trading desk.
He also advocated boosting China’s crude oil imports from the Americas to help the world’s largest oil importing country to diversify its suppliers.
Read more at Channel News Asia