Everything about Petrochina totally explained
PetroChina Company, Limited () ( ) is a
Chinese oil company and is the listed arm of state-owned
China National Petroleum Corporation (CNPC),
mainland China's biggest producer of oil. and following its debut on the
Shanghai index, its market value tripled.
History
PetroChina was established as a
joint stock 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 and marketing, chemicals and
natural gas 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 on the wholesale and retail business of oil products it shares with
Sinopec in China.
Because of its link to
Sudan through parent company CNPC, several institutional investors such as
Harvard and
Yale decided, in 2005, to divest from Sinopec. Sudan divestment efforts have continued to be concentrated on PetroChina since then.
Fidelity Investments, after pressure from activist groups, also announced in a filing in the US that it had sold 91 per cent of its
American Depositary Receipts 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.
On November 7, 2007,
Hang Seng Index Services Company announced that PetroChina would have been
Hang Seng Index Constituent Stock since 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 genocide in
Darfur.
Environmental Record
Introduction
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, environmental-related news about PetroChina has been often negative.
Major Chemical Spill
Petrochina had a huge chemical spill in November, 2005. One of its chemical plants exploded in Jilin, China. The blast poured 100 tons of benzene, which is a carcinogen and highly toxic, into the Songhua River. There was a slick of chemicals that spanned 80km. 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 have been injured, one person is missing, and five have died, due to this incident. The spill prompted China’s environmental agency to fine the company one million yuan (approximately $125,000, £64,000) for its pollution, which is the maximum fine that can be handed out in China for breaking an environmental law. However, this disaster has now sparked controversy about this law. People are claiming it's 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 has said it'll 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(西气东输）" Pipeline Project
Another major controversial issue is PetroChina’s development in gas reserves in Tarim Basins, Tibet. 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.
Recent Demonstration on PetroChina's 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 capitol 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's intervention was scarce.
Recognition
- Forbes published its latest ranking of the “Forbes 2000 The World’s Leading Companies”. The company ranked first amongst companies in China and ranked 55 worldwide.
- 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:
- 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.
Further Information
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