China National Petroleum Corp. (CNPC), the country's largest oil producer, denied earlier media reports about a workforce cut of about 80,000 people over the coming three years, a CNPC senior executive said on Tuesday on condition of anonymity.

Earlier reports were based on the remarks of Jiang Jiemin, general manager of CNPC at a meeting of company executives held on July 22, announcing that the company would cut 5 percent of its jobs over three years as profits had been squeezed by heavy refining losses.

CNPC denied the number of job cuts worked out by the media based on its boss's "5 percent staff cut" statement and the total workforce number of 1.67 million publicized on its website, but didn't give any details about the number of job cuts.

"As a giant state-run company, CNPC would be very cautious about cutting its workforce," the official said.

An anonymous CNPC employee revealed that CNPC had two kinds of employees -- regular employees and short-term employees. The company now has more than 500,000 short-term employees who are said to be the main target of job cuts, because CNPC can choose not to extend contracts when they end.

Retirements and a cut down in recruitment may also lead to a workforce reduction. Every year, about 40,000-50,000 retire from CNPC, according to the anonymous employee.

CNPC suffers heavy losses because of the gap between rocketing crude prices on international markets and the government capped domestic oil prices.

CNPC's pre-tax profit dropped by 39 percent year on year to 56.4 billion yuan (8.3 billion U.S. dollars) in the first half year as a result of refining loss and windfall taxes on crude oil sales.

The oil giant earlier announced that it would cut non-production spending including office costs and entertainment fees by 10 percent from the previous year.

To reduce costs, CNPC halted or cut investment in 49 projects in June, saving the company up to 20.72 billion yuan.

PetroChina, CNPC's listed arm, announced last month that it would issue no more than 60 billion yuan of debenture bond to "satisfy the operational needs of the company, further improve its debt structure, reduce financing costs and supplement working capital."

(Xinhua News Agency July 30, 2008)