PetroChina IPO

Filed in archive IPOs on July 16, 2007

PetroChina, Mainland China's largest oil company, has set November as a tentative date for an initial public offering on the Shanghai Stock Exchange, according to a number of news sources.

The Sydney Morning Herald was among the sources that carried the report. They said that ChinaPetro hoped to raise as much as RMB50 billion (about US$6.6 billion) through the IPO. PetroChina has hired the Swiss firm UBS and China-based CITIC securities to underwrite the IPO. The company plans to sell about 4 billion A-shares through the listing. The IPO listing should be approved at the August 10 shareholders meeting.

The announcement that ChinaPetro will float an IPO comes on the heels of the discovery last month of what a huge new oil and gas reserve in Bohai Bay in northeastern China. The discovery there of an estimated discovered 1.02 billion metric tons of petroleum is said to be the largest petroleum discovery in China in more than 30 years. ChinaPetro has struggled in the past to maintain oil production; the Bohai Bay oil field may end that problem.

PetroChina has been in the news recently for other reasons - among them, the decision this week to break off negotiations with Canada to build a pipeline from Ottawa to Canada's West Coast. Fellow blogger Ken Chapman quoted Canadian media sources in which PetroChina said that the political environment in Canada was "not comfortable. We tried to come here and we can't." PetroChina went to say, according to Chapman, that they "sincerely wanted to do something and open up a new market for Canadian crude...but Canada doesn't want to open up is own markets to us." Canadians were stunned and angered by the remarks.