PetroChina Now World’s Largest Listed Company by Market Value

6 November 2007

People’s Daily. State-owned PetroChina, China’s largest oil and gas producer, replaced ExxonMobil as the world’s largest listed company by market value on Monday as its share price surged 163% to close at 43.96 yuan (US$5.90) on its first day of trading on the Shanghai Stock Exchange.

By offering shares on the mainland, the company is trying to increase its crude oil production to match its refining capacity, said Zheng Yi, an analyst with Guangfa Securities.

The company’s market value on the Shanghai bourse crested the $1-trillion mark, surging past Exxon Mobil, currently valued at US$487.7 billion. It is the first time a company has been valued at one trillion dollars.

PetroChina raised 66.8 billion yuan (US$8.9 billion) in Shanghai by selling four billion A shares, or 2.18% of its expanded share capital, in the world’s biggest initial public offering (IPO) so far this year.

PetroChina will use 6.84 billion yuan and 5.93 billion yuan respectively to boost production capacity at its Changqing and Daqing oil fields. Changqing produced more than 10.5 million tons of oil in 2006. Daqing, one of China’s largest oil fields, produced more than 43 million tons of crude oil last year, accounting for almost 25% of the nation’s total.

A total of 1.5 billion yuan will be used to build production facilities at Jidong field, the country’s largest. Jidong Nanpu Oilfield, the largest oil discovery by PetroChina in four decades, will have an annual output of 10 million tons by 2012, according to the company’s plan.

It also plans to invest 17.5 billion yuan to upgrade its Dushanzi oil refinery and ethylene facilities and six billion yuan in expanding an ethylene plant in Daqing, in northeast China.

"The oil fields that PetroChina is putting money into will be China’s major oil sources in the future,”said Han Xuegong, an oil expert.

China will be able to produce enough refined oil to meet domestic demand after the completion of more than 20 refining projects of at least 10 million tons by 2010, according to the nation’s medium and long-term plan for the oil refining industry.