PetroChina
| File:PetroChina logo.svg | |
| Company type | Public |
|---|---|
| Industry | Oil and gas |
| Founded | November 5, 1999 |
| Founder | China National Petroleum Corporation (CNPC) |
| Headquarters | Beijing , China |
Area served | Asia, international |
Key people | Li Zhiming (Canadian subsidiary leader) |
| Products | Oil, natural gas, petrochemicals, refining |
| Parent | China National Petroleum Corporation (CNPC) |
| Website | www |
PetroChina Company Limited () operates as a Chinese oil and gas enterprise and serves as the publicly traded subsidiary of the state-owned China National Petroleum Corporation (CNPC). Its headquarters are situated in Beijing's Dongcheng District. Recognized as the largest oil and gas producer across Asia, PetroChina holds listings on both the Hong Kong and New York stock markets. In November 2007, the company revealed intentions to list shares on the Shanghai market and subsequently became part of the SSE 50 Index. According to the 2020 Forbes Global 2000 ranking, PetroChina was positioned as the 32nd-largest publicly traded company worldwide.
History
PetroChina was founded on 5 November 1999 as a joint stock company with limited liability under China's Company Law. This formation involved reorganizing CNPC by transferring most of its assets and obligations related to exploration, production, refining, marketing, chemical manufacturing, and natural gas operations to PetroChina.
In 2005, several institutional investors such as Harvard and Yale divested from Sinopec due to its parent company's connections with Sudan; subsequent divestment campaigns targeted PetroChina. Early in 2007, Fidelity Investments reduced its holdings by selling 91% of its PetroChina American Depositary Receipts following pressure from activist groups.
In May 2007, PetroChina announced a significant oil discovery at the Jidong Nanpu field in Bohai Bay, marking China's largest find in ten years; however, projections were revised downward by May 2008.
On 7 November 2007, PetroChina was incorporated into the Hang Seng Index effective from 10 December that year. The company attracted international criticism for continuing trade relations with Sudanese authorities during the Darfur crisis.
A landmark agreement was signed on 19 August 2009 between PetroChina and ExxonMobil valued at A$50 billion for liquefied natural gas (LNG) sourced from Australia's Gorgon field. This contract secured a two-decade supply term and represented China's largest energy deal with Australia despite diplomatic tensions related to espionage concerns.
The Dushanzi refinery operated by PetroChina commenced full operations on 24 September 2009. As China's biggest refinery facility, it boasts an annual processing capacity of 10 million tons of crude oil and produces one million tons of ethylene yearly, aligning with China's strategy to import crude from Kazakhstan.
In February 2011, PetroChina acquired a 49% interest in Canadian shale assets within the Duvernay formation from Encana for $5.4 billion, marking the largest Chinese investment in shale gas to date. Its Canadian operations are managed through a subsidiary based in Calgary under the leadership of Li Zhiming.
By 2016, China had entered into an agreement with Nepal Oil Corporation to supply approximately 30% of Nepal's petroleum needs, including plans to construct a pipeline and storage facility in Panchkhal.
Following increased commercial natural gas prices, PetroChina's share value experienced growth throughout 2017.
In February 2019, within the framework of its Arrow Energy joint venture with Royal Dutch Shell, PetroChina secured $10 billion (AUS) worth of leases for development in Queensland’s Surat Basin. Later in May that year, Liaoyang Petrochemical, a subsidiary of PetroChina, conducted its inaugural diesel export shipment to Europe. The company reported a profit of US$4 billion for fiscal year 2019.
By the year 2023, PetroChina had received state subsidies totaling roughly US$343 million.
During the first half of 2022, PetroChina intensified its renewable energy initiatives by installing wind and solar power capacity amounting to 5.36 gigawatts and advancing geothermal projects covering 11.2 million square meters. This expansion followed a 55.3% increase in interim earnings compared to the previous year.
PetroChina Pipelines
PetroChina Pipelines, a subsidiary with 72.26% ownership by PetroChina, oversees the management of the initial three pipelines within the project.
History
The pipeline's construction commenced in 2002, followed by trial operations beginning on 1 October 2004, and full commercial deliveries starting 1 January 2005. Operated by PetroChina West–East Gas Pipeline Company, a PetroChina subsidiary, the original ownership structure planned for PetroChina to hold 50%, with Royal Dutch Shell, Gazprom, and ExxonMobil each owning 15%, and Sinopec holding 5%. Nevertheless, joint venture discussions collapsed in August 2004, leading to the termination of the agreement.
Technical features
Stretching from Lunnan in Xinjiang to Shanghai, this pipeline passes through 66 cities across ten provinces. Its primary role is to supply natural gas for power generation within the Yangtze River Delta region. The pipeline's annual throughput capacity stands at , built with an investment of US$5.7 billion. Expansion plans aimed to boost capacity to by late 2007 through the addition of ten compressor stations and upgrades to eight existing ones.
Connections
The West–East Gas Pipeline connects with the Shaan-Jing pipeline via three branch lines. Notably, the Ji-Ning branch, linking Qingshan and Anping distribution stations, began operations on 30 December 2005.
Source of supply
The main source of gas is the Tarim Basin oil and gas fields located in Xinjiang, supplemented by supplies from the Changqing area in Shaanxi. Future plans include integration with the proposed Kazakhstan-China gas pipeline.
Since 15 September 2009, coalbed methane extracted from the Qinshui Basin in Shanxi has also been transported via this pipeline.
West–East Gas Pipeline II
Construction for the second West–East Gas Pipeline started on 22 February 2008. Covering —including a main line of plus eight sub-lines—this pipeline extends from Khorgas in Xinjiang to Guangzhou in Guangdong. It runs parallel and connects with the first pipeline up to Gansu. The western segment was projected for completion in 2009, while the eastern segment was targeted for June 2011.
With an annual capacity of , it primarily receives supply from the Central Asia-China gas pipeline. The project, with an estimated cost of approximately US$20 billion, is developed by China National Oil and Gas Exploration and Development Corp. (CNODC), a joint venture between China National Petroleum Corporation and PetroChina.
West–East Gas Pipeline III
The third pipeline's construction began in October 2012 and was slated for completion by 2015. It stretches from Horgos in western Xinjiang to Fuzhou in Fujian, crossing multiple provinces including Xinjiang, Gansu, Ningxia, Shaanxi, Henan, Hubei, Hunan, Jiangxi, Fujian, and Guangdong.
This pipeline extends over , featuring a trunkline and eight branch lines. The project incorporates three gas storage facilities along with an LNG plant. Its annual capacity reaches , operating at pressures of . Supply sources encompass Line C of the Central Asia–China gas pipeline, the Tarim Basin fields, and coalbed methane resources in Xinjiang. Compressor units are provided by Rolls-Royce.
Chemical Spills
In November 2005, an explosion at a PetroChina chemical facility in Jilin discharged approximately 100 tons of benzene, a known carcinogen, into the Songhua River, resulting in an 80-kilometer-long chemical contamination. This event compelled Harbin authorities to suspend water supply for nearly four million residents over a period of five days. The accident led to more than 60 injuries, five fatalities, and one individual reported missing. The pollution extended downstream to Khabarovsk, Russia, where local inhabitants resorted to stockpiling bottled water due to safety concerns.
PetroChina was fined one million yuan (around $125,000), the highest penalty permitted by Chinese environmental regulations. Cleanup expenses were projected to reach one billion US dollars. Former Foreign Minister Li Zhaoxing formally apologized to the Russian government. The Chinese media criticized the government's response to the incident.
In 2014, PetroChina’s subsidiary Lanzhou Petrochemical encountered accusations related to leaks of ethylene and ammonia, contamination of water supplies with benzene, and air quality degradation in Lanzhou. Regional authorities publicly reprimanded the company and demanded a formal apology.
The "Western Gas to the East" Pipeline Project
PetroChina’s exploitation of natural gas resources in the Tarim Basin, located in Xinjiang, has generated disputes concerning possible environmental hazards.[1][2]
Protest at Chengdu Facility
In 2008, PetroChina commenced building a petrochemical complex in Chengdu with an investment of $5.5 billion, designed to produce 800,000 tons of ethylene and process 10 million tons of crude oil annually. Although $565 million was designated for environmental safeguards, local communities staged peaceful demonstrations on May 3 and 4, 2008, expressing concerns over potential pollution. The protests were largely nonviolent and met with limited government response.[3]
Trade Irregularities
On January 19, 2022, Chinese regulators sanctioned PetroChina’s subsidiary "PetroChina Fuel Oil Co Ltd" for engaging in irregular oil trading activities that disrupted market stability, promoted expansion of outdated refinery capacities, and indirectly reduced government tax revenues, as stated by the National Development and Reform Commission.[4]
Human Rights Issues
In 2011, EarthRights International accused PetroChina of participating in severe human rights violations in Myanmar, where military-supported economic initiatives have been associated with forced labor practices.[5][6]
Corruption
In September 2013, Jiang Jiemin, who had served as chairman of PetroChina, was dismissed from his position at the State-owned Assets Supervision and Administration Commission of the State Council and subjected to a corruption probe along with four other top oil executives. Jiang, known for his association with the disgraced security official Zhou Yongkang, was found guilty in October 2015 of bribery, holding illegal assets, and power misuse, leading to a 16-year prison term.
Former vice chairman Liao Yongyuan received a 15-year sentence in January 2017 for charges including abuse of authority and accepting bribes totaling nearly $2 million. In October 2021, the Central Commission for Discipline Inspection initiated an inquiry into ex-vice president Ling Xiao concerning serious breaches of party discipline.
Tax issues
Leaked financial documents in January 2014 exposed that PetroChina, alongside CNPC, Sinopec, and CNOOC, employed offshore shell corporations registered in the British Virgin Islands as part of tax avoidance schemes.
Ranking
PetroChina was positioned 30th in the 2018 edition of the Forbes Global 2000 list featuring leading global publicly traded companies. The company advanced to 22nd place in 2019 and climbed further to rank 18th in the 2023 Forbes Global 2000, highlighting its expanding market influence and robust financial performance.
Corporate bonds
On October 24, 2008, PetroChina launched medium-term corporate bonds amounting to 80 billion yuan (approximately $11.7 billion), establishing a record as the largest bond issuance domestically by a publicly listed firm at that time.
Logo
Adopted in 2004, PetroChina’s emblem depicts a rising sun above a petal-inspired design rendered in red and yellow—colors traditionally associated with prosperity in Chinese culture. This symbol embodies the company’s global ambitions and its ten fundamental business sectors. The red foundation represents solid fundamentals and unity, while the floral element illustrates PetroChina’s dedication to harmonizing energy production with environmental stewardship. The sun conveys the organization's aspiration toward a flourishing future.
See also
Sources
- 2004 Annual Report, pp. 135, 137
- McGregor, Richard. The Party: The Secret World of China's Communist Rulers. Harper Perennial: New York, 2012. .
External links
- Official website (English)
- Official website (Chinese)
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