13 year-old PetroChina passed Exxon this week as the world’s largest publicly traded oil company.
USA Today reported:
The 13-year-old Beijing company was created by the Chinese government to secure more oil for that nation’s booming economy. PetroChina (PTR) announced Thursday that it pumped 2.4 million barrels a day last year, passing Exxon by 100,000 barrels.
The company has grown rapidly the last decade by squeezing more from China’s aging oil fields and outspending Western companies to buy petroleum reserves in countries including Canada, Iraq and Qatar. It’s motivated by a need to lock up as much oil as possible.
The company’s output increased 3.3% in 2011 while Exxon’s (XOM) fell 5%. Exxon’s oil production also fell behind Rosneft, the Russian energy company. PetroChina’s rise highlights a fundamental difference in how the largest petroleum companies plan to supply the world as new oil becomes tougher to find and more expensive to produce.
Every major oil company has aggressively pursued new finds to replace existing wells. But analysts say Western oil firms like ExxonMobil have been more conservative than the Chinese, mindful of their bottom line and investor returns. With oil prices up 19% in 2011, they made money without increasing production. PetroChina has a different mission.
The Chinese government owns 86% of its stock and the nation uses nearly every drop of oil PetroChina pumps. The country’s appetite for gasoline and other petroleum products is projected to double between 2010 and 2035.
“There’s a lot of anxiety in China about the energy question,” says energy historian Dan Yergin. “It’s just growing so fast.” While PetroChina sits atop other publicly traded companies in oil production, it falls well short of national oil companies like Saudi Aramco, which produces nearly 8 million barrels a day.