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PetroChina

PetroChina

Overview
PetroChina Company Limited is a Chinese oil company and is the listed arm of state-owned China National Petroleum Corporation
China National Petroleum Corporation
China National Petroleum Corporation is a state-owned fuel-producing corporation and the largest integrated oil and gas company in the People's Republic of China...

 (CNPC), headquartered in Dongcheng District
Dongcheng District, Beijing
Dongcheng District is an urban district in Beijing covering the eastern half of Beijing's urban core. It is 24.7 square kilometres in area and has a population of 535,558 . Dongcheng District covers several important parts of Beijing...

, Beijing
Beijing
Beijing , also known as Peking , is the capital of the People's Republic of China and one of the most populous cities in the world, with a population of 19,612,368 as of 2010. The city is the country's political, cultural, and educational center, and home to the headquarters for most of China's...

. It is China's biggest oil producer, and was the world's most valuable company by market value as of September 28th 2010. Traded in Hong Kong
Hong Kong Stock Exchange
The Hong Kong Stock Exchange is a stock exchange located in Hong Kong. It is Asia's third largest stock exchange in terms of market capitalization behind the Tokyo Stock Exchange and the Shanghai Stock Exchange and fifth largest in the world...

 and New York
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...

, the mainland enterprise announced its plans to issue stock in Shanghai
Shanghai Stock Exchange
The Shanghai Stock Exchange , abbreviated as 上证所/上證所 or 上交所, is a stock exchange that is based in the city of Shanghai, China. It is one of the two stock exchanges operating independently in the People's Republic of China, the other is the Shenzhen Stock Exchange...

 in November 2007, and following its debut on the Shanghai index, its market value tripled, making PetroChina the first company to reach a trillion dollar market capitalization.


PetroChina was established as a joint stock company
Joint stock company
A joint-stock company is a type of corporation or partnership involving two or more individuals that own shares of stock in the company...

 with limited liabilities under the Company Law of the People's Republic of China (the PRC) on November 5, 1999, as part of the restructuring of CNPC.
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Encyclopedia
PetroChina Company Limited is a Chinese oil company and is the listed arm of state-owned China National Petroleum Corporation
China National Petroleum Corporation
China National Petroleum Corporation is a state-owned fuel-producing corporation and the largest integrated oil and gas company in the People's Republic of China...

 (CNPC), headquartered in Dongcheng District
Dongcheng District, Beijing
Dongcheng District is an urban district in Beijing covering the eastern half of Beijing's urban core. It is 24.7 square kilometres in area and has a population of 535,558 . Dongcheng District covers several important parts of Beijing...

, Beijing
Beijing
Beijing , also known as Peking , is the capital of the People's Republic of China and one of the most populous cities in the world, with a population of 19,612,368 as of 2010. The city is the country's political, cultural, and educational center, and home to the headquarters for most of China's...

. It is China's biggest oil producer, and was the world's most valuable company by market value as of September 28th 2010. Traded in Hong Kong
Hong Kong Stock Exchange
The Hong Kong Stock Exchange is a stock exchange located in Hong Kong. It is Asia's third largest stock exchange in terms of market capitalization behind the Tokyo Stock Exchange and the Shanghai Stock Exchange and fifth largest in the world...

 and New York
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...

, the mainland enterprise announced its plans to issue stock in Shanghai
Shanghai Stock Exchange
The Shanghai Stock Exchange , abbreviated as 上证所/上證所 or 上交所, is a stock exchange that is based in the city of Shanghai, China. It is one of the two stock exchanges operating independently in the People's Republic of China, the other is the Shenzhen Stock Exchange...

 in November 2007, and following its debut on the Shanghai index, its market value tripled, making PetroChina the first company to reach a trillion dollar market capitalization.

History



PetroChina was established as a joint stock company
Joint stock company
A joint-stock company is a type of corporation or partnership involving two or more individuals that own shares of stock in the company...

 with limited liabilities under the Company Law of the People's Republic of China (the PRC) on November 5, 1999, as part of the restructuring of CNPC. In the restructuring, CNPC injected into PetroChina most of the assets and liabilities of CNPC relating to its exploration and production, refining
Oil refinery
An oil refinery or petroleum refinery is an industrial process plant where crude oil is processed and refined into more useful petroleum products, such as gasoline, diesel fuel, asphalt base, heating oil, kerosene, and liquefied petroleum gas...

 and marketing, chemicals and natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...

 businesses.

Although PetroChina is the most profitable company in Asia, this success may be the result of corporate management, but can also be attributed to the near duopoly
Duopoly
A true duopoly is a specific type of oligopoly where only two producers exist in one market. In reality, this definition is generally used where only two firms have dominant control over a market...

 on the wholesale and retail business of oil products it shares with Sinopec
Sinopec
China Petroleum & Chemical Corporation Limited , or Sinopec Limited , is a majority owned subsidiary of state owned company Sinopec Group. Sinopec Limited is listed in Hong Kong and also trades in Shanghai and New York ....

 in China.

Because of Sinopec
Sinopec
China Petroleum & Chemical Corporation Limited , or Sinopec Limited , is a majority owned subsidiary of state owned company Sinopec Group. Sinopec Limited is listed in Hong Kong and also trades in Shanghai and New York ....

's link to Sudan
Sudan
Sudan , officially the Republic of the Sudan , is a country in North Africa, sometimes considered part of the Middle East politically. It is bordered by Egypt to the north, the Red Sea to the northeast, Eritrea and Ethiopia to the east, South Sudan to the south, the Central African Republic to the...

 through parent company China Petrochemical Corporation
China Petrochemical Corporation
China Petrochemical Corporation or Sinopec Group is Asia's largest oil refining and petrochemical enterprise, administered by SASAC for the State Council of the People's Republic of China...

, several institutional investors such as Harvard and Yale
YALE
RapidMiner, formerly YALE , is an environment for machine learning, data mining, text mining, predictive analytics, and business analytics. It is used for research, education, training, rapid prototyping, application development, and industrial applications...

 decided, in 2005, to divest from Sinopec. Sudan divestment efforts have continued to be concentrated on PetroChina since then. Fidelity Investments
Fidelity Investments
FMR LLC or Fidelity Investments is an American multinational financial services corporation one of the largest mutual fund and financial services groups in the world. It was founded in 1946 and serves North American investors. Fidelity Ventures is its venture capital arm...

, after pressure from activist groups, also announced in a filing in the US that it had sold 91 per cent of its American Depositary Receipt
American Depositary Receipt
An American depositary receipt is a negotiable security that represents the underlying securities of a non-U.S. company that trades in the US financial markets...

s in PetroChina in the first quarter of 2007.

At the beginning of May 2007, the company announced it had made China's largest oil find in a decade off the country's northeast coast, in an oilfield named Jidong Nanpu in Bohai Bay
Bohai Bay
Bohai Bay is one of the three bays forming the Bohai Gulf, the innermost gulf of the Yellow Sea, in northeast China. It borders Hebei province and Tianjin Municipality...

. In May 2008 these expectations were lowered.

On November 7, 2007, Hang Seng Index
Hang Seng Index
The Hang Seng Index is a freefloat-adjusted market capitalization-weighted stock market index in Hong Kong. It is used to record and monitor daily changes of the largest companies of the Hong Kong stock market and is the main indicator of the overall market performance in Hong Kong...

 Services Company announced that PetroChina would be a Hang Seng Index Constituent Stock, effective December 10, 2007. PetroChina has also come under scrutiny from international organizations for its part in trading with the Sudanese government who continues the ongoing war in Darfur
War in Darfur
The Darfur Conflict was a guerrilla conflict or civil war centered on the Darfur region of Sudan. It began in February 2003 when the Sudan Liberation Movement/Army and Justice and Equality Movement groups in Darfur took up arms, accusing the Sudanese government of oppressing non-Arab Sudanese in...

.

On August 19, 2009, PetroChina signed an AU$50 billion deal with ExxonMobil
ExxonMobil
Exxon Mobil Corporation or ExxonMobil, is an American multinational oil and gas corporation. It is a direct descendant of John D. Rockefeller's Standard Oil company, and was formed on November 30, 1999, by the merger of Exxon and Mobil. Its headquarters are in Irving, Texas...

 to purchase liquefied natural gas from the Gorgon field in Western Australia, considered the largest contract ever signed between China and Australia, which ensures China a steady supply of LNG fuel
Liquefied natural gas
Liquefied natural gas or LNG is natural gas that has been converted temporarily to liquid form for ease of storage or transport....

 for 20 years, and also forms as China's largest supply of relatively "clean energy". This deal has been formally secured, despite relations between Australia and China being at their lowest point in years, following the Rio Tinto espionage case
Rio Tinto espionage case
The Rio Tinto espionage case began with the arrest on 5 July 2009, of four staff in the Shanghai office of the Rio Tinto Group, in the People's Republic of China, who were subsequently accused of bribery and espionage. Two days later, an import executive of the Shougang Group and Laigang Group was...

 and the granting of visas to Rebiya Kadeer
Rebiya Kadeer
Rebiya Kadeer is a prominent Uyghur businesswoman and political activist from the northwest region of Xinjiang Autonomus Region of the People's Republic of China...

 to visit Australia.

PetroChina's Dushanzi District
Dushanzi District
Dushanzi District is a district within the Xinjiang Uyghur Autonomous Region in China and is under the administrative jurisdiction of the Karamay City. It contains an area of 400 km2. According to the 2002 census, it has a population of 60,000....

 refinery became fully operational on September 24, 2009. The refinery is China's largest refinery with annual capacity of 10 million tons of oil and 1 million tons of ethylene. The refinery is an integral part of China's ambitions to import oil from Kazakhstan
Kazakhstan
Kazakhstan , officially the Republic of Kazakhstan, is a transcontinental country in Central Asia and Eastern Europe. Ranked as the ninth largest country in the world, it is also the world's largest landlocked country; its territory of is greater than Western Europe...

.

February 2011: PetroChina has agreed to pay $5.4 billion for a gas field stake owned by Encana. It is the China's biggest investments in shale gas which is difficult-to-extract.

Environmental record


Although PetroChina is promoting safety, environmental protection and people-orientation as its slogan and is determined to encourage efficiency in utilization of resource as well as effective operation of the Health, Safety and Environment (HSE) management system as a method to reduce emission of pollutants.

Chemical spill


Petrochina
PetroChina
PetroChina Company Limited is a Chinese oil company and is the listed arm of state-owned China National Petroleum Corporation , headquartered in Dongcheng District, Beijing. It is China's biggest oil producer, and was the world's most valuable company by market value as of September 28th 2010...

 had a chemical spill in November, 2005. One of its chemical plants exploded in Jilin, China, resulting in 100 tons of benzene
Benzene
Benzene is an organic chemical compound. It is composed of 6 carbon atoms in a ring, with 1 hydrogen atom attached to each carbon atom, with the molecular formula C6H6....

, which is a carcinogen and toxic, pouring into the Songhua River. There was a slick of chemicals that spanned 80 kilometres. Harbin, which is another city along the Songhua River, had to cut the water supply from almost 4 million people, for 5 days. More than 60 people were injured, five died, and one person was missing due to the incident. The spill prompted China’s environmental agency to fine the company one million yuan (approximately $125,000, £64,000) for its pollution, which was the maximum fine that can be handed out in China for breaking an environmental law. However, this disaster sparked controversy about this law. People claimed the law was too soft. The spill even crept into Kharbosvk, Russia, where residents stocked up on bottled water. The city tried filtering its water of toxic substances, but officials were still unsure if the water was 100% safe for drinking. The Chinese government said it will take more than one billion dollars to clean up the aftermath. Li Zhaoxing, Chinese Foreign Minister at the time, issued a public apology to Russia due to the incident.

The "Western Gas to the East" Pipeline Project


Another major controversial issue is PetroChina’s development in gas reserves in Tarim Basins, Xinjiang. It is now constructing a pipeline across Tibet to Gansu province in China, eventually lead to Shanghai. It is argued that such a project might pose a threat to the environment, as the construction of the pipeline might affect the wildlife in the regions where it runs through. Also, the exiled Tibetan government argued that such project is part of China’s strategy to consolidate political control of the Western Regions in China, including Tibet. However, no known environmental or social impact assessments have been conducted, as the environmental record of Tarim Basins is very poor.

Demonstration at new plant


Approved in 2007, a $5.5 billion petrochemical plant, expected to produce 800,000 tons of ethylene and refine 10 million tons of crude oil a year, is now under construction by PetroChina in Chengdu, provincial capital of Sichuan in Southwestern China. Ethylene is widely used in the production of goods such as packaging and trash liners. Although the project claimed that $565 million of the total investment would be dedicated to environmental protection, residents of Chengdu who believe it might bring pollution to the local area took to the streets on May 3 and 4, 2008, to protest against the project. The whole demonstration was peaceful, and presence of Chinese government intervention was scarce.

Recognition

  • Forbes
    Forbes
    Forbes is an American publishing and media company. Its flagship publication, the Forbes magazine, is published biweekly. Its primary competitors in the national business magazine category are Fortune, which is also published biweekly, and Business Week...

     published its latest ranking of the “Forbes 2000 The World’s Leading Companies”. The company ranked 6th in the world for public companies.
  • The Company won a series of awards in the competition organised by FinanceAsia, an influential magazine in Asia Pacific capital markets. The Company won the following awards:
    • Best Dividend
      Dividend
      Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...

       Payout Policy, 1st
    • Best Corporate Governance
      Corporate governance
      Corporate governance is a number of processes, customs, policies, laws, and institutions which have impact on the way a company is controlled...

      , 5th
    • Best Investor Relations, 5th
  • AsiaMoney’s 2004 “Annual Best-Managed Large Companies Poll”, the Company was awarded the “Overall Best-Managed Large Cap Company” and “Overall Most Improved Company for Best-Management Practices” Awards.

Corporate bonds


PetroChina, on 2008-10-24 issued a 80 billion yuan ($11.7 billion) of medium-term corporate bonds, which was the biggest ever domestic issue by a listed company.http://news.xinhuanet.com/english/2008-10/21/content_10230506.htm

External links