DoJ Hits PetroChina With Fine for U.S. Export Law Violation

The U.S. Department of Justice has issued a fine of $14.5 million to PetroChina following allegations that it broke U.S. export law and a five-year investigation.

According to the United States Attorney’s Office for the Southern District of Texas, PetroChina “had reported inaccurate information in the Automated Export System, an electronic database that exporters use to declare international exports from the United States.”

“Specifically, PCIA misclassified more than $32 million of ultra-low-sulfur diesel fuel as mineral oil mix for certain export transactions to Mexico that took place in 2019 and 2020,” the release said.

The company agreed to pay the fine, the news release from the Attorney’s Office for the Southern District of Texas also said, adding it had fully cooperated with the investigation that began in 2019 when the U.S. authorities were alerted by their Mexican counterparts about a discrepancy between the import documents of a Panamanian-flagged tanker.

PetroChina, a state-owned integrated oil corporation, earlier this year became the second-largest company in China by market value, overtaking the Industrial and Commercial Bank of China. Bloomberg reported in April that the oil major’s stock had soared by 42% since the start of the year, bringing its market value to the equivalent of some $244 billion. The surge was a result of higher oil prices that have lifted energy stocks around the world.

PetroChina also enjoyed the added advantage of a strong recovery in domestic crude oil demand, which led to record profits and dividend payouts, contributing to the attractiveness of the stock.

The company in April had a net income of $22.3 billion (161 billion Chinese yuan) for 2023, up by 8.3% on the year, thanks to recovering domestic consumption of refined petroleum products and a surge in natural gas demand. The figure was a record high for the company.

By Charles Kennedy for Oilprice.com

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