China has added another feather to its cap of being home to emerging global giant industries with the state owned PetroChina becoming the world’s largest oil producing company on Monday. The company became the first in the world to attain a market cap of over $1 trillion dollars surpassing the Irving based Exxon Mobil Corp with a market cap of $484.5 billion.
PetroChina Co, which is a unit of the state owned China National Petroleum Corp., is China’s largest oil and gas producer. The value of its new shares listed in the Shanghai stock exchange rose to 43.96 Yuan or $5.90 on Monday; nearly triple the IPO price of 16.70 Yuan or $2.24. Its initial public offering of 4 billion shares raised a record $8.94 billion from the mainland bourse. The volume of PetroChina shares traded in the Shanghai, Hong Kong and the New York stock exchanges added to the market capitalization of over $1 trillion.
As other Yuan denominates ‘A shares’ traded in China, the shares of PetroChina issued in Shanghai for meant for domestic investors only.
PetroChina’s status as the world’s most valued oil producing company does not necessarily mean that it has outperformed its rivals in terms of better profitability or productivity. However, the company’s revenue has soared amid rising oil prices but it has been struggling to increase production from its aging domestic oil fields. It is also struggling to manage the widening gap between rising global crude prices and the state controlled prices of oil products in the domestic market.
The company will use a major part of the money raised from its Shanghai issue to finance five projects aimed at increasing its crude oil output and refining capacity. It also intends to make heavy overseas investments.
Source:dallas news
Image:Business Week
