Libya Investigating Unipec, PetroChina Oil Deals Under Gadhafi

Libya's prosecutor office is probing possible irregularities in crude sales to oil giants China International United Petroleum & Chemical Co., or Unipec, and PetroChina Co. Ltd.  as part of a broader probe into Gadhafi-era oil deals, a file from Libya's Interpol bureau shows.

A file issued last month, attached to a request of arrest against the late ex-oil chief Shokri Ghanem by Libya's Interpol bureau, alleges he agreed to sell oil without contracts to Sinopec and Petrochina.

The probe could cloud the return of energy-thirsty China to Libya after being cast as a supporter of the former regime.

Ghanem, the ex-head of the National Oil Co., "also delivered quantities of crude oil to several companies such as Unipec and PetroChina before signing an agreement with them," the file seen by Dow Jones said.

Sinopec and PetroChina spokespeople declined to comment.

Though Ghanem has since died in Vienna's Danube river in mysterious circumstances, the probe into his dealings continues, said Abdulhamid Eljadi, an anticorruption activist who has been assisting the investigation.

The rebels who fought former Libyan leader Moammar Gadhafi last year had previously said Chinese companies would be at a disadvantage for opposing the foreign intervention which led to them gaining power. However, Unipec, the trading unit of China's largest refiner Sinopec, has now returned to Libya as one of the country's largest oil buyers.

Sales to the two Chinese companies had previously been singled out for scrutiny by Libyan government officials.

The Libyan Interpol document said the issues surrounding sales to PetroChina and Unipec had been first raised by Najwa el-Beshti, who was head of contracts at NOC's marketing department under Ghanem.

Beshti told Dow Jones Newswires the sales had taken place between June 2008 and 2010.

She said contracts had typically been signed six months to a year after deliveries had started, potentially enabling the companies to pay with a delay.

Libyan oil officials have previously said companies which gained irregular deals under Gadhafi could be disadvantaged or lose deals under the new regime. Mustafa El-Huni, the official responsible for oil at the interim National Transitional Council, said last year it would be up to Libyan courts, not the NOC or the interim government, to establish if a contract is valid. "If [corruption] is proven, the law will judge," El-Huni said at the time.

(Source: Dow Jones Newswires, Fox Business)

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