PetroChina plans massive A share issue<\/p>\n
BEIJING (Reuters): Chinese oil giant PetroChina Co Ltd said on
\nFriday it is planning the biggest ever domestic A-share offer to
\nraise funds for a massive natural gas pipeline project.<\/p>\n
A top official said the offer to local investors was possible
\nthis year and that the proceeds would go to developing gas fields
\nto feed gas into its planned 4,200 km pipeline, which will
\nstretch from the western region of Xinjiang to eastern Shanghai
\ncity.<\/p>\n
\"Based on the company's development and fund raising needs, we
\nexpect that PetroChina's A-share listing will probably be the
\nbiggest ever fund-raising exercise in China's domestic capital
\nmarkets,\" said Wang Fucheng, executive director and vice
\npresident of PetroChina.<\/p>\n
\"We do not rule out the possibility of issuing A shares around
\nthe end of this year,\" he said at a news briefing. \"This year and
\nnext year are both a good time for the domestic market.\" He
\ndeclined to give further details.<\/p>\n
Foreign investors and analysts have raised concerns over
\nwhether gas resources were sufficient and whether the market
\nexisted to justify the large project, which will cost an
\nestimated US$14.5 billion.<\/p>\n
PetroChina is already listed on the New York and Hong Kong
\nstock markets. But analysts say the domestic A-share market is
\nattractive because of it typically provides higher valuations and
\ncheaper funding.<\/p>\n
Another overseas-listed Chinese oil major, China Petroleum &
\nChemical Corp (Sinopec), said earlier this month it planned to
\nraise more than 10 billion yuan ($1.2 billion) with an A-share
\noffer, which would make it the biggest issue yet.<\/p>\n
Wang said PetroChina's offer would be well-received, given
\nexpectations for a performance matching last year's, when the
\ncompany had net profits of 55.23 billion yuan.<\/p>\n
PetroChina officials also sought to soothe fears over the
\neast-west pipeline saying preparations were proceeding smoothly.<\/p>\n
Wang said PetroChina had just raised estimates for reserves in
\ntwo areas that will supply the pipeline -- the Tarim Basin in
\nXinjiang and Erdos Basin in western China.<\/p>\n
PetroChina had raised its estimate of the proven natural gas
\nreserves in the Tarim Basin to 650 billion cubic metres by the
\nend of this year or the first half of next year from the previous
\n491 billion cubic metres, Wang said.<\/p>\n
For the Erdos Basin, the company now put reserves at 1.0 to
\n1.1 trillion cubic metres by the end of this year, against the
\ncurrent 750.4 billion cubic metres, he said.<\/p>\n
Wang said the estimated cost of the project had not changed
\nand that construction on a pilot section of the pipeline was on
\ntrack to start in the fourth quarter and finish by 2005.<\/p>\n
\"The various preparatory work of the west-east gas pipeline
\nproject is being carried out in a timely and systematic manner,\"
\nhe said. \"The downstream market continues to expand.\"<\/p>\n
PetroChina also repeated that a bill approved by the U.S.
\nHouse of Representatives seeking to punish companies operating in
\nSudan would not hurt the Chinese firm as it did not currently
\nhave assets or investment in the African country.<\/p>\n
PetroChina's parent, China National Petroleum Corp, owns a
\nstake in an oilfield in Sudan and plans to establish two new
\nfields, officials say.<\/p>\n
In June, House members approved the \"Sudan Peace Act\", which
\nincluded an amendment that would prohibit foreign companies from
\nbeing listed on U.S. stock exchanges if they engage in oil
\nexploration in Sudan, the site of a bloody 18-year civil war.<\/p>",
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