KEY POINTS:
PetroChina has became the world's first US$1 trillion company, surpassing Exxon Mobil as the shares started trading on the Shanghai stock exchange.
PetroChina's Class-A shares almost tripled on their Shanghai debut, rising as high as 48.62 yuan ($8.50) from the sale price of 16.7 yuan. The listing gives
mainland Chinese their first opportunity to own the stock.
China's largest oil and gas producer has been listed since 2000 in Hong Kong, where it advanced 78 per cent this year as investors sought to profit from the world's fastest-growing major economy.
The Beijing-based company's shares soared as the Hang Seng Index in Hong Kong rose 53 per cent and the CSI 300 index of shares listed on the Shanghai and Shenzhen exchanges increased 168 per cent.
"Local investors might have a different risk-tolerance level to global investors, so we may see PetroChina's A-shares trading at a premium" to its Hong Kong stock, said Lei Wang, a co-manager of Thornburg International Value Fund in Santa Fe, New Mexico.
PetroChina reached 43.96 yuan in Shanghai, valuing the company at more than US$1 trillion ($1.3 trillion). Exxon is worth US$488 billion on the New York Stock Exchange. In Hong Kong, PetroChina fell 7 per cent to HK$18.20 The Chinese oil producer trades at almost 60 times earnings in Shanghai, compared with Exxon's valuation of 13 times.
PetroChina's market value is higher than Russia's gross domestic product.
"I feel very excited today and also feel a very strong sense of responsibility," chairman Jiang Jiemin said at the Shanghai Stock Exchange. "This is PetroChina returning to our investors and the society."
The company had 20.5 billion barrels of oil and gas reserves in 2006, compared with 22.1 billion for Texas- based Exxon, data compiled by Bloomberg show. PetroChina has been adding new reserves at an average annual rate of 5 per cent for the past three years, a faster pace than Exxon, Royal Dutch Shell and BP, the world's largest oil companies by sales.
The share sale, the world's biggest this year, surpassed the 66.6 billion yuan generated by China Shenhua Energy Co. in September.
Mainland Chinese investors were until now prevented from directly buying PetroChina stock, missing out on a 15-fold surge as economic growth turned the nation into the largest oil consumer after the US and as crude prices reached a record US$96.24 a barrel in New York.
Investors applied for more than 3.3 trillion yuan of stock, almost 50 times the amount PetroChina sold. Chinese companies now represent five of the world's 10 largest by market value, raising investor concerns that the market is too expensive.
Billionaire investor Warren Buffett's Berkshire Hathaway sold its stake in PetroChina this year, reaping an eightfold gain that contributed to a 64 per cent increase in third-quarter profit for the Omaha-based company.
Berkshire had 2.34 billion shares at the end of 2006, the largest holding after state-owned China National Petroleum.
- Bloomberg