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PetroChina, the country’s largest oil and gas company, yesterday
announced it will make a long-awaited A-share offering in Shanghai - the
latest among overseas-listed Chinese companies to “return home”.

The company stated on its corporate website that it plans to issue 4
billion shares to domestic investors. The offer is subject to approval by
shareholders and the market regulator.

The move could raise up to HK$47 billion ($6 billion), based on its
record closing price of HK$11.74 in Hong Kong yesterday.

PetroChina’s turnover was 689 billion yuan ($90 billion) in 2006, the
same as Beijing’s gross domestic product in 2005.

The company said it will use the proceeds from the issue for
development of its “domestic petroleum and gas resources”, construction of
large-scale refinery, petrochemical and gas pipeline projects, and
“acquisition of overseas petroleum and gas resources”.

The company did not indicate the offer price but analysts believe it
will be higher than the traded price of H shares in Hong Kong and other
markets around the world.

Han Xiaoping, an independent energy analyst with Beijing Falcon Pioneer
Technology Co Ltd, said a higher A-share price will boost its H-share
performance.

Based on the domestic market strength, he said, “there will be hardly
any doubt that the company will set the A-share price at a higher level
than its H share”.

In early May, PetroChina said it planned to spend 40 billion yuan ($5.2
billion) in the following three years on its new Jidong Oilfield in
eastern Hebei Province, China’s largest oil discovery in four decades.

Zheng Weigang, at Shanghai Securities, said Petro-China’s domestic
listing will play a significant role in stabilizing the highly volatile
domestic capital market.

The move suggests the market watchdog is pinning high hopes on
blue-chip companies to boost the quality of mainland bourses and deflate
potential bubbles in the market.

In another development, sources at CNOOC, the offshore oil and gas
exploration giant, told China Daily yesterday that the preparation for the
issue of the company’s A-shares is “right on track”.

Last week, overseas-listed China Construction Bank and top shipper
China COSCO also unveiled domestic listing plans.

By Wang Yu