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May 26, 2009
Article from: The Australian

http://www.theaustralian.news.com.au/story/0,25197,25537490-643,00.html

"PETROCHINA has overtaken ExxonMobil by market capitalisation, regaining its rank as the world's most valuable company, after China's stimulus plan caused a stock surge.

State-controlled PetroChina's Shanghai-traded shares have jumped 30 per cent this year for a value of $US336.4 billion, surpassing Exxon's $US335.9 billion. Government spending has increased fuel consumption in China this year, while the worst recession since the Great Depression curbs demand in the US.

"If you have to buy an energy stock, you want to buy the dominant one in China," said Gordon Kwan, head of energy research at Mirae Asset Securities in Hong Kong. "China's fuel demand is growing, while in Northern America and Europe demand is actually falling."

China's benchmark Shanghai Composite Index has surged 43 per cent this year on optimism that the $US586 billion economic stimulus introduced by the Government in November and record bank lending will counter a slump in exports and boost growth. The S&P 500 index in the US has dropped 1.8 per cent.

Exxon rose 0.6 per cent to $US68.83 in New York trading on Friday, but has declined 14 per cent this year. PetroChina, which listed in Hong Kong in 2000, became the world's first trillion-dollar company after selling shares in Shanghai in November 2007, when it first passed the US oil company.

Exxon, which traces it roots to the 1880s and John D. Rockefeller's Standard Oil Trust, had regained the top ranking in March last year after PetroChina's Shanghai stock slumped by more than 50 per cent as exploration costs climbed and government controls prevented the company from increasing fuel prices.

PetroChina's reserves surpassed those of Exxon last year after the Chinese company added the equivalent of 890 million barrels of oil through discoveries and acquisitions. Exxon's reserves declined 3 per cent last year to the equivalent of 21.1 billion barrels, enough to sustain output for almost 15 years.

China agreed to give Russia, Kazakhstan, Brazil and Venezuela $US49 billion in loans this year in exchange for oil supplies. The Government is tapping its $US1.95 trillion foreign exchange reserves to buy energy assets made cheaper by oil's decline from a record $US147.27 a barrel in July. China National Petroleum Corp, PetroChina's parent, is the largest foreign developer of oil fields in Sudan.

PetroChina's 14 per cent return on capital is less than half of Exxon's 36 per cent, the highest among the world's biggest 10 oil companies by sales. Exxon is bigger by sales and profit.

The US company raked in $US425 billion in sales last year, or $US60.45 for every man, woman and child on the planet. Exxon's 2008 profit of $US45.22 billion was the highest ever for a US corporation. PetroChina's net income was 114 billion yuan ($US16.7 billion) last year."

Bloomberg