PetroChina shares down by a third

While other global oil giants are reporting record profits, Chinese government price controls prevent PetroChina and other domestic refiners from passing on the higher costs of crude oil to consumers. Qiu Xiaofeng, a petroleum analyst at China Merchants Securities in Shanghai, estimates that PetroChina will report 48.5 billion yuan (US$7.08 billion) in net profit for the first half, down about 40% from 81.8 billion yuan (US$11.94 billion) during the same period a year ago. With the end of the Olympics, Beijing will move to raise retail fuel prices to at least partly reflect rising costs for Chinese refiners, following increases of up to 18% in June. PetroChina was valued at more than US$1 trillion following its mammoth share offering in Shanghai last October, making it the world’s most expensive company by market capitalization, though not the most profitable. But its share price has since dropped. It remains the biggest component in the Shanghai Composite Index, but its market capitalization has dropped to about US$360 billion, including shares traded in Mainland China, Hong Kong and New York, Qiu said. (August 26, 2008)