One Chinese TV report said that Chen had "taken a huge amount of bribes and abused his power to gain inappropriate benefits for his mistress. He led a decadent life, and his behavior is a severe breach of party disciplines."

A U.S. state department cable released by Wikileaks later revealed Chen's mistress had slept with several high ranking party officials and was a spy.

The promiscuous socialite had also been having affairs with several other high-level officials, including Sichuan Party Secretary and former Agricultural Minister Du Qinglin. The woman had been introduced to these men as "someone working with a Chinese military intelligence department." However, investigators now believe she is a Taiwan intelligence operative.

The company's website now says, "the Party Committee of Sinopec Group has attached great important to the development of the corruption punishment and prevention system."

After the high profile scandal, the CCP changed the leadership of all three oil companies in 2011. The current head of Sinopec, Fu Chengyu, known as Chairman Fu, served as the head of CNOOC and was a former party secretary.

But paying bribes remains such a common practice in Chinese business culture that even China's central bank admitted in 2011 that corrupt Chinese officials smuggled an estimated$123.6 billion out of the country over a 15-year period.

A 2007 Carnegie study concluded that, "The direct economic loss owing to corruption represents a large transfer of wealth -- at least three per cent of GDP per year -- to a tiny group of elites. This annual transfer, from the poorer to the richer, is fueling China's rapid increase in socioeconomic inequality and the public's perception of social injustice."

'Luxury liquors scandal'

Meanwhile, Sinopec has had other problems at home.

Most prominent was the "luxury liquors scandal." In 2011, the Guangdong office of refining giant (Guangdong Province is China's largest oil market), spent $200,000 on 50-year-old bottles of Kweichow Moutai and Chateau Latife Rothschild, at a time when ordinary Chinese faced stiff oil prices. In response, Sinopec said the purchases were part of its "normal operations."

One corporate watchdog recounted: "Sinopec's chairman stated that the public had a right to criticize Sinopec, as it is a state-owned enterprise. Meanwhile, it was reported that Sinopec Guangdong held internal meetings to discuss how the public relations department should handle media interviews and required all departments to trace the leak in order to punish the whistleblower."

Sinopec's environmental record is one of serial violations for air pollution and water contamination. It's one of 175 firms listed on the Hong Kong stock exchange that account for 750 environmental violations in mainland China, home to 16 of the world's 20 most polluted cities.

In 2007, China's top environmental agency ordered the company to suspend an oil field operations due to chronic river pollution. Sinopec refused to comment.

In another case, Sinopec added manganese at 98 times its proper concentration to one of its formula gasolines in 2010. The "problem with oil" scandal affected 900,000 tonnes of oil and damaged hundreds of vehicles.

Sinopec later reported that "the worker and involved staff accountable for the incident were severely punished afterwards. In the meantime, we formulated a long-term quality control system as precautionary approach in the future."

'Nothing short of shameful'

In Canada, Sinopec is still contesting its role in the death of two of its contract workers in the oil sands in 2007.

"It's nothing short of shameful," says McCowan of Alberta's Federation of Labour. "It's clear from our perspective that Sinopec's construction subsidiary puts its workers at risk by ignoring Alberta health and safety rules, standards codes and the rules for temporary foreign workers... If this is the future of Chinese state investment in this country, I think that Canadian workers and the Canadian public should be very concerned."

Three months after meeting with Sinopec's Chairman Fu last November, Natural Resource Minister Joe Oliver launched an unprecedented attack against critics of the Northern Gateway pipeline. (Oliver made no mention of Sinopec's open flaunting of Canadian law.)

The former investment banker accused "environmentalists and other radical groups" of thwarting Canada's opportunity to diversify trade with China. The minister characterized the largely Chinese funded project as a "nation building project."

Michael Klare, a global oil and politics expert at Hampshire College in Massachusetts and author of The Race for What's Left, suspects that the Canadian government's overtures to China's national oil companies over the Northern Gateway Pipeline are all part of a coordinated chess game.  

"I suspect that Harper is in league with right-wing Republicans in the United States to embarrass President Obama. Look, you are going to lose out on this democratic and wonderful Canadian oil to China and all because of Obama's extremism."

Last year, the Obama administration temporarily rejected the Keystone XL pipeline which would have pumped bitumen to U.S. Gulf Coast refineries. "I think it will be one of the top three presidential election issues."

Canada's apparent embrace of China's state capitalism is "all to put pressure on Obama to give in. I don't think the Northern Gateway project is a serious, genuine play," says Klare.

Sinopec's poor record is not unique in the oil patch, even among state owned companies.

"The national oil companies are shaped by the political culture in which they originate," says Klare. "Sinopec is neither the worst nor the best of the bunch." Mexico's national oil company, Pemex, is much more corrupt, adds Klare.

Moreover, Sinopec's rapid revenue growth is a "recipe for corruption and environmental destruction, wherever it occurs."

[Tags: Energy, Politics.]