 | |
| Company type | State owned enterprise |
| Company type | Oil and gas |
| Founded | 5 November 1999 |
| Headquarters | Dongcheng District, Beijing China |
| Area served | Worldwide with primary markets in China |
| Key people | Zhou Jiping (Chairman) Wang Dongjin (CEO) |
| Products | Fuels, lubricants, natural gas, petrochemicals |
| Services | |
| Revenue |  US$297 Billion (2020) |
| Number of employees | 506,000 (2019) |
| Parent | China National Petroleum Corporation |
| Subsidiaries | Singapore Petroleum Company |
PetroChina Company Limited is a Chinese multinational oil and gas company and the publicly traded arm of the state-owned China National Petroleum Corporation (CNPC). Headquartered in Dongcheng District, Beijing, PetroChina is currently the largest oil and gas producer in Asia. The company is listed on the Hong Kong Stock Exchange and the New York Stock Exchange, and it announced plans to issue shares on the Shanghai Stock Exchange in November 2007. PetroChina is also a constituent of the SSE 50 Index. As of the 2020 Forbes Global 2000, PetroChina ranked as the 32nd-largest public company in the world.
History
PetroChina Company Limited was established on 5 November 1999 as a joint stock company with limited liabilities under the Company Law of the People's Republic of China, following the restructuring of China National Petroleum Corporation (CNPC). The restructuring saw CNPC transfer most of its exploration and production, refining and marketing, chemicals, and natural gas assets and liabilities to PetroChina.
Early Divestments and International Scrutiny
In 2005, following concerns about Sinopec's links to Sudan through its parent company China Petrochemical Corporation, several institutional investors, including Harvard and Yale, divested from Sinopec. This divestment effort was later focused on PetroChina. Additionally, in the first quarter of 2007, Fidelity Investments sold 91% of its American Depositary Receipts in PetroChina under pressure from activist groups.
Oil Discoveries and Market Expansion
In May 2007, PetroChina announced it had discovered China's largest oil find in a decade off the northeast coast at the Jidong Nanpu oil field in Bohai Bay. However, these expectations were later revised downward in May 2008.
Addition to the Hang Seng Index
On 7 November 2007, PetroChina was added to the Hang Seng Index, effective 10 December 2007. During this time, the company faced scrutiny for its business dealings with the Sudanese government, particularly amid the ongoing conflict in Darfur.
Key Deals and Investments
In 2009, PetroChina signed a landmark A$50 billion deal with ExxonMobil to purchase liquefied natural gas (LNG) from the Gorgon field in Western Australia. This contract, which spanned 20 years, was the largest between China and Australia and secured China’s largest supply of relatively clean energy. PetroChina also launched its Dushanzi District refinery in September 2009, China's largest refinery, with an annual capacity of 10 million tons of oil and 1 million tons of ethylene.
Shale Gas Investment and International Expansion
In 2011, PetroChina made its largest shale gas investment by acquiring a 49% stake in Canada's Duvernay shale assets owned by Encana for $5.4 billion. The subsidiary, PetroChina Canada, is based in Calgary.
Expansion into Nepal
In 2016, PetroChina reached an agreement with the Nepal Oil Corporation to sell 30% of Nepal's petroleum consumption and committed to building a pipeline to Nepal, along with a storage depot in Panchkhal.
Natural Gas Price Rise and Renewable Energy Focus
The company saw a rise in its shares in 2017 due to increased natural gas prices for commercial use. In February 2019, PetroChina, in partnership with Royal Dutch Shell in the Arrow Energy joint venture, secured leases worth $10 billion for the Surat project in Queensland, Australia.
Recent Performance and Renewable Energy Investments
PetroChina posted a profit of US$4 billion in 2019, and in 2023, it received US$343 million in state subsidies. In 2022, PetroChina accelerated its renewable energy efforts, installing 5.36 gigawatts of wind and solar power plants and 11.2 million square meters of geothermal projects, contributing to a 55.3% year-on-year increase in its interim earnings.
PetroChina Pipelines
PetroChina Pipelines is a subsidiary of PetroChina, with a 72.26% stake, responsible for managing the first three pipelines of the West–East Gas Pipeline project.
West–East Gas Pipeline I
History
The construction of the West–East Gas Pipeline began in 2002, with trial operations starting on 1 October 2004 and full commercial supply commencing on 1 January 2005. Initially, the joint venture agreement had PetroChina owning 50%, with Royal Dutch Shell, Gazprom, ExxonMobil, and Sinopec holding 15%, 15%, 15%, and 5%, respectively. However, in August 2004, PetroChina announced that the joint venture framework agreement was terminated after unsuccessful negotiations with other parties.
Technical Features
The 4,000-kilometer (2,500 mi) pipeline runs from Lunnan in Xinjiang to Shanghai, passing through 66 cities in 10 Chinese provinces. The pipeline supplies natural gas for electricity production in the Yangtze River Delta area. It has a capacity of 12 billion cubic meters (420 billion cubic feet) of natural gas annually. The total cost of the project was US$5.7 billion, with plans for an upgrade to 17 billion cubic meters (600 billion cubic feet) by the end of 2007, involving ten new gas compressor stations and upgrades to eight existing ones.
Connections
The pipeline connects to the Shaan-Jing pipeline via three branch pipelines. The Ji-Ning branch, an 886-kilometer (551 mi) long pipeline, became operational on 30 December 2005.
Source of Supply
The West–East Gas Pipeline is primarily supplied from the Tarim Basin oil and gas fields in Xinjiang, with additional supply from the Changqing gas area in Shaanxi province. Starting in 2009, coalbed methane from the Qinshui Basin in Shanxi was also supplied.
West–East Gas Pipeline II
Construction and Features
Construction of the second West–East Gas Pipeline started on 22 February 2008. It will stretch 9,102 kilometers (5,656 mi), including 4,843 kilometers (3,009 mi) of the main line and eight sub-lines, running from Khorgas in Xinjiang to Guangzhou in Guangdong. The western part of the pipeline was expected to be commissioned by 2009, with the eastern part completed by June 2011.
The pipeline will have a capacity of 30 billion cubic meters (1.1 trillion cubic feet) of natural gas annually and will mainly be supplied by the Central Asia–China gas pipeline. The total cost of the project is estimated at US$20 billion. The development is being led by China National Oil and Gas Exploration and Development Corp. (CNODC), a joint venture between CNPC and PetroChina.
West–East Gas Pipeline III
Construction and Features
Construction of the third West–East Gas Pipeline began in October 2012, with completion expected by 2015. The pipeline will run from Horgos in Xinjiang to Fuzhou in Fujian, crossing several provinces including Gansu, Ningxia, Shaanxi, Henan, Hubei, Hunan, Jiangxi, Fujian, and Guangdong.
The third pipeline will be 7,378 kilometers (4,584 mi) long, including 5,220 kilometers (3,240 mi) of trunkline and eight branches. The project will also include three gas storages and an LNG plant. With a capacity of 30 billion cubic meters (1.1 trillion cubic feet) annually, the pipeline will operate at pressures of 10–12 megapascals (1,500–1,700 psi). It will be supplied by the Central Asia–China gas pipeline's Line C, as well as additional supplies from the Tarim Basin and coalbed methane in Xinjiang. Rolls-Royce supplies the compressors for the pipeline.
Controversies
Chemical Spills
2005 Jilin Chemical Plant Explosions
In November 2005, a PetroChina chemical plant in Jilin, China, exploded, spilling 100 tons of benzene into the Songhua River. This toxic chemical slick spanned 80 kilometers, severely affecting water supplies for nearly 4 million people in Harbin, who were without water for five days. The spill reached as far as Khabarovsk, Russia, where residents stocked up on bottled water, and the city attempted to filter its water, though it could not guarantee its safety. In response, China's environmental agency fined PetroChina one million yuan, the maximum fine allowed under environmental law. The Chinese government estimated that cleaning up the aftermath would cost one billion US dollars. Foreign Minister Li Zhaoxing issued a public apology to Russia, and the Chinese press criticized the authorities' handling of the disaster.
Lanzhou Petrochemical Leaks
In 2014, PetroChina’s subsidiary Lanzhou Petrochemical was responsible for significant environmental issues, including ethylene and ammonia leaks, benzene contamination of water supplies, and air pollution in Lanzhou. The local government criticized the company for these environmental violations and demanded an apology.
The "Western Gas to the East" Pipeline Project
PetroChina’s development of gas reserves in the Tarim Basin, Xinjiang, has raised environmental concerns. The project's impact on the environment has been controversial, as it could potentially threaten the ecological balance in the region.
Demonstration at Chengdu Plant
In 2008, PetroChina began constructing a $5.5 billion petrochemical plant in Chengdu, China, which was expected to produce 800,000 tons of ethylene and refine 10 million tons of crude oil annually. Despite PetroChina's claims that $565 million of the investment would go toward environmental protection, residents of Chengdu were concerned about potential pollution. This led to peaceful demonstrations on 3 and 4 May 2008, with little intervention from the Chinese government.
Trade Anomalies
In January 2022, PetroChina’s subsidiary, PetroChina Fuel Oil Co. Ltd., was punished by Chinese authorities for alleged inconsistencies in oil trading. The National Development and Reform Commission stated that these inconsistencies severely disrupted the oil products market, facilitated the blind development of outdated production capacity at independent refineries, and caused indirect losses in government tax revenue.
Human Rights
In 2011, Earthrights International accused PetroChina of complicity in serious human rights abuses in Burma. The country was known for using forced labor to further economic interests, a practice which PetroChina allegedly supported.
Corruption
Jiang Jiemin and Senior Executives Investigation
In September 2013, Jiang Jiemin, former chairman of PetroChina, was removed from his role as director of the State-owned Assets Supervision and Administration Commission of the State Council and investigated for corruption and abuse of power, alongside four other senior executives. Jiang was reportedly allied with the corrupt former security chief Zhou Yongkang. In October 2015, Jiang was found guilty on all charges, including accepting bribes, possessing dark assets, and abusing power, and was sentenced to 16 years in prison.
Liao Yongyuan’s Sentence
In January 2017, former vice chairman Liao Yongyuan was sentenced to 15 years in prison for abuse of power and accepting nearly $2 million in bribes.
Ling Xiao's Investigation
In October 2021, the Central Commission for Discipline Inspection announced that it was investigating former vice president Ling Xiao for “serious disciplinary violations.”
Tax Issues
In January 2014, the International Consortium of Investigative Journalists published research based on leaked financial records from the British Virgin Islands, implicating CNPC, PetroChina, Sinopec, and CNOOC in offshore tax evasion.
References
- Dwivedi, N. (no date) Myanmar: Chinese influence expands as PetroChina acquires 119 fuel stations near India border, raising security concerns, Swarajya by Kovai Media Private Limited. Available at: https://swarajyamag.com/news-brief/myanmar-chinese-influence-expands-as-petrochina-acquires-119-fuel-stations-near-india-border-raising-security-concerns (Accessed: 13 January 2025).
- InfluenceMap (no date) Petrochina Company Limited, LobbyMap Home. Available at: https://lobbymap.org/company/PetroChina-Company-Limited-b382e1bcc1183ab36ce2f55e8d540fc7 (Accessed: 13 January 2025).
- Petrochina (2025) Wikipedia. Available at: https://en.wikipedia.org/wiki/PetroChina (Accessed: 13 January 2025).
- Petrochina beats ICBC to become China’s second-largest stock (2024) Bloomberg.com. Available at: https://www.bloomberg.com/news/articles/2024-04-02/petrochina-beats-icbc-to-become-second-largest-onshore-stock (Accessed: 13 January 2025).
- Petrochina begins $4.5-B refinery expansion (no date) Hydrocarbon Processing - Refining, Petrochemical, Gas Processing and LNG Magazine, Data and Information. Available at: https://www.hydrocarbonprocessing.com/news/2022/07/petrochina-begins-45-b-refinery-expansion (Accessed: 13 January 2025).
