PetroChina's gasoline station in Beijing Photo: CFP

PetroChina said on Thursday it is actively cooperating with the government's investigation and that production and operations have not been affected after its subsidiary was found to have engaged in irregular behavior linked to crude oil trading.

In an announcement on Thursday, PetroChina said it has launched an internal review, aimed at improving the company's crude oil trading system.

Top executives at PetroChina have been held accountable following a recent investigation by the State Council into the illegal resale of 179.5 million tons of imported crude oil to 115 local refining companies, a move that damaged fair competition and led to a loss of national fiscal revenue.

The State Council, China's cabinet, formed an investigation team to deal with the issue of reselling of imported crude oil by Petrochina Fuel Oil Co, a subsidiary of PetroChina, according to Xinhua News Agency on Wednesday. 

After verification and investigation, it was found that in June 2006, the fuel oil company sold 400,000 tons of imported crude oil, or "blended fuel oil," to Shandong Binhua Group. 

Over the years, PetroChina has sold a total of 179.5 million tons of imported crude oil to 115 local refining companies. The main leaders of PetroChina have been accused of serious negligence during this period.

PetroChina's reselling of imported crude oil not only violated the administrative licensing law and other relevant laws and regulations, but also seriously disrupted the oil market order, according to media reports.

This behavior has contributed to the blind development of outdated production capacity at illegal local refining enterprises. It also undermined fair market competition, and indirectly caused a loss of national fiscal revenue, the report said.