REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Date of event requiring this shell company report |
For the transition period from |
Title of Each Class |
Trading Symbol |
Name of Each Exchange on Which Registered | ||
H Shares, par value RMB1.00 per share |
New York Stock Exchange, Inc.** |
A Shares, par value RMB1.00 per share*** |
(1) | |
H Shares, par value RMB1.00 per share |
(1) |
Includes 146,882,339,136 A Shares held by CNPC and 15,039,738,682 A Shares held by the public shareholders. |
Accelerated Filer ☐ | Non-Accelerated Filer ☐ |
Emerging Growth company |
☐ U.S. GAAP |
☒ |
☐ Other |
* | PetroChina’s H Shares are listed and traded on The Stock Exchange of Hong Kong Limited. | |
** | t for trading, but only in connection with the registration of American Depository Shares. | |
*** | PetroChina’s A Shares became listed on the Shanghai Stock Exchange on November 5, 2007. | |
**** | Includes 902,243,200 H Shares represented by American Depositary Shares. |
• | “CNPC” or “CNPC group” are to our parent, China National Petroleum Corporation and its affiliates and subsidiaries, excluding PetroChina, its subsidiaries and its interests in long-term investments, and where the context refers to any time prior to the establishment of CNPC, those entities and businesses which were contributed to CNPC upon its establishment. |
• | “PetroChina”, “we”, “our”, “our company”, “the Company” and “us” are to: PetroChina Company Limited, a joint stock company incorporated in the People’s Republic of China with limited liability and its subsidiaries and branch companies. |
• | “PRC” or “China” are to the People’s Republic of China, but does not apply to its Hong Kong, Macau and Taiwan for purposes of this annual report. |
1 barrel-of-oil |
= 1 barrel of crude oil |
= 6,000 cubic feet of natural gas | ||
1 cubic meter |
= 35.315 cubic feet |
|||
1 ton of crude oil |
= 1 metric ton of crude oil |
= 7.389 barrels of crude oil (assuming an API gravity of 34 degrees) |
“acreage” |
The total area, expressed in acres, over which an entity has interests in exploration or production. Net acreage is the entity’s interest, expressed in acres, in the relevant exploration or production area. |
“condensate” |
Light hydrocarbon substances produced with natural gas that condense into liquid at normal temperatures and pressures associated with surface production equipment. |
“crude oil” |
Crude oil, including condensate and natural gas liquids. |
“developed reserves” |
Under the reserves rules of the Securities and Exchange Commission, or SEC, developed reserves are reserves of any category that can be expected to be recovered: |
(i) through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well; and |
(ii) through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means not involving a well. |
“development cost” |
For a given period, costs incurred to obtain access to proved reserves and to provide facilities for extracting, treating, gathering and storing the oil and gas. |
“finding cost” |
For a given period, costs incurred in identifying areas that may warrant examination and in examining specific areas that are considered to have prospects of containing oil and gas reserves, including costs of drilling exploratory wells and exploratory-type test wells. Finding cost is also known as exploration cost. |
“lifting cost” |
For a given period, costs incurred to operate and maintain wells and related equipment and facilities, including applicable operating costs of support equipment and facilities and other costs of operating and maintaining those wells and related equipment and facilities. Lifting cost is also known as production cost. |
“natural gas liquids” |
Hydrocarbons that can be extracted in liquid form during natural gas production. Ethane and pentanes are the predominant components, with other heavier hydrocarbons also present in limited quantities. |
“offshore” |
Areas under water with a depth of five meters or greater. |
“onshore” |
Areas of land and areas under water with a depth of less than five meters. |
“primary distillation capacity” |
At a given point in time, the maximum volume of crude oil a refinery is able to process in its basic distilling units. |
“proved reserves” |
Under the SEC reserves rules, proved reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible — from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations — prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time. |
(i) The area of the reservoir considered as proved includes: |
(A) The area identified by drilling and limited by fluid contacts, if any, and (B) Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data. |
(ii) In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons (LKH) as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty. |
(iii) Where direct observation from well penetrations has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty. |
(iv) Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when: |
(A) Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and (B) The project has been approved for development by all necessary parties and entities, including governmental entities. |
(v) Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month |
“reserves-to-production |
For any given well, field or country, the ratio of proved reserves to annual production of crude oil or, with respect to natural gas, to wellhead production excluding flared gas. |
“natural gas for sale” |
Marketable production of gas on an “as sold” basis, excluding flared gas, injected gas and gas consumed in operations. |
“undeveloped reserves” |
Under the SEC reserves rules, undeveloped reserves are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion. |
(i) Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances. |
(ii) Undrilled locations can be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances, justify a longer time. |
(iii) Under no circumstances shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir, or by other evidence using reliable technology establishing reasonable certainty. |
• | BOE is to barrels-of-oil |
• | Mcf is to thousand cubic feet, and |
• | Bcf is to billion cubic feet. |
• | the amounts and nature of future exploration, development and other capital expenditures; |
• | future prices and demand for crude oil, natural gas, refined products and chemical products; |
• | development projects; |
• | exploration prospects; |
• | reserves potential; |
• | production of oil and gas and refined and chemical products; |
• | development and drilling potential; |
• | expansion and other development trends of the oil and gas industry; |
• | the planned development of our natural gas operations; |
• | the planned expansion of our refined product marketing network; |
• | the planned expansion of our natural gas infrastructure; |
• | the prospects of our new energy business; |
• | the anticipated benefit from our ongoing arrangements with PipeChina; |
• | the anticipated benefit from the acquisition of certain overseas assets from CNPC, our parent company; |
• | the plan to continue to pursue attractive business opportunities outside China; |
• | our future overall business development and economic performance; |
• | our anticipated financial and operating information regarding, and the future development and economic performance of, our business; |
• | our anticipated market risk exposure arising from future changes in interest rates, foreign exchange rates and commodity prices; and |
• | other prospects of our business and operations. |
• | fluctuations in crude oil and natural gas prices; |
• | effects of the COVID-19 pandemic; |
• | failure to achieve continued exploration success; |
• | failures or delays in achieving production from development projects; |
• | continued availability of capital and financing; |
• | acquisitions and other business opportunities that we may pursue; |
• | general economic, market and business conditions, including volatility in interest rates, changes in foreign exchange rates and volatility in commodity markets; |
• | liability for remedial actions under environmental regulations; |
• | the actions of competitors; |
• | wars and acts of terrorism or sabotage; |
• | changes in policies, laws or regulations of the PRC, including changes in applicable tax rates; |
• | the other changes in global economic and political conditions, including those affecting the production, supply and demand and pricing of crude oil, refined products, petrochemical products and natural gas; and |
• | the other risk factors discussed in this annual report, and other factors beyond our control. |
• | Energy transition policy |
• | Product pricing mechanism |
• | Crude oil special gain levy |
• | Mineral rights granting system Mineral Resources Law of the PRC |
• | Ecological and environmental protection and safety production |
• | Project approvals |
• | Oil and gas production targets non-fossil energy in China’s domestic energy consumption to increase to about 17.3%. Although failure to achieve these targets will not subject us or other relevant companies to fines, these targets themselves would have an effect on our business decisions, hence, driving our management to make plans to work towards achievement of the pre-set targets. |
• | Anti-monopoly |
• | Corporate governance and securities regulatory compliance |
• | Divestment |
• | Trade disruptions and wind-down of operations non-US persons, such as certain secondary sanctions administered by the Office of Foreign Assets Control (“OFAC”) of the US Department of the Treasury, and certain trade controls administered by the Bureau of Industry and Security of the U.S. Commerce Department, especially under the “foreign direct product rules”, in certain circumstances, we and certain of our business partners may need to exercise business judgment to wind down certain existing projects or abandon or change some business plans. As a result, we may suffer adverse consequences, such as supply disruptions, increased costs of raw materials, impairment of assets or loss of profit-making opportunities. |
• | Risks of being sanctioned or implicated in sanctions |
• | Reputation risks |
• | Compliance risks non-compliance of sanctions may subject us to penalties. |
• | CNPC indirectly holds 20% equity interest in OAO Yamal LNG and 10% equity interest in Arctic LNG 2, both of which are more than 50% owned by OAO Novatek. |
• | CNPC has long-term agreements with Rosneft, Transneft, Gazprom and Arctic LNG 2, all of which are subject to OFAC-administered sanctions, to import crude oil, natural gas or LNG from Russia. CNPC has resold, and will for the foreseeable future resell, all or a substantial portion of the imported crude oil under the crude oil agreements to us. |
• | Our company has for a long time imported natural gas from Gazprom, and LNG from a subsidiary of OAO Yamal LNG. |
• | we may be delisted from the U.S., whether voluntarily or by mandatory requirements, and investors of our ADSs will then have to sell their ADSs or convert the ADSs into our H Shares; |
• | the market price of our ADSs may be materially and adversely affected by the risk aversion and other negative market sentiment, regardless of our actual operating conditions; |
• | if any investor of our ADSs does not convert the ADSs held by him/her into our H Shares for any reason, those ADSs may eventually lose all market value due to the loss of liquidity on the NYSE; |
• | affected by the decline in the market value of ADSs, the prices of our H Shares, the underlying securities of ADSs, may drop significantly; |
• | the conversion of ADSs into H Shares will incur some costs and cause some inconvenience; and |
• | if in the future we propose to conduct a follow-on offering overseas, the proposed offering may be hindered by the occurrence of any one or more of the foregoing events. |
• | direct our policies, management and other various affairs; |
• | subject to applicable PRC laws and regulations and provisions of our Articles of Association, affect the timing and amount of dividend payments and adopt amendments to certain of the provisions of our Articles of Association; and |
• | otherwise determine the outcome of most corporate actions and, subject to the regulatory requirements of the jurisdictions in which our shares are listed, cause our company to effect corporate transactions without the approval of minority shareholders. |
• | In terms of market position |
competitive. On the contrary, the share of fossil fuels in primary energy consumption is expected to decrease. The Chinese government plans to increase the share of non-fossil fuels in primary energy consumption from 15% in 2019 to around 25% by 2030. This would have an effect on our position in the refined oil market and the development strategies for the new energy market that we are currently implementing. |
• | In terms of liquidity |
• | In terms of compliance |
• | In terms of legal proceedings |
• | In terms of reputation low-carbon development goals, our reputation may be affected adversely. |
• | In terms of physical impact |
• | the trading of our ADSs on the NYSE may be prohibited or our ADSs may be mandatorily delisted from the NYSE. If that happens, the investors of our ADSs will be forced to sell their ADSs or convert the ADSs into our H Shares; |
• | the market price of our ADSs may be materially and adversely affected by the risk aversion and other negative market sentiment, regardless of our actual operating conditions; |
• | if any investor of our ADSs does not convert the ADSs held by him/her into our H Shares for any reason, those ADSs may eventually lose all market value due to the loss of liquidity on the NYSE; |
• | affected by the decline in the market value of ADSs, the prices of our H Shares, the underlying securities of ADSs, may drop down significantly; and |
• | the conversion of ADSs into H Shares will incur some costs and cause some inconvenience. |
• | The deterioration of socio-economic conditions and disruptions to our operations, such as our supply chain, refining or distribution capabilities, which may result in increased costs due to the need for more complex supply chain arrangements, to expand existing facilities or to maintain inefficient facilities, or in a reduction of our sales volumes. |
• | Reductions or volatility in demand for crude oil and refined and petrochemical products due to quarantine or other travel restrictions, economic hardship, retail closures or illness, which may impact our revenue and market share. |
• | Significant volatility in financial markets (including exchange rate volatility) and measures adopted by governments and central banks that further restrict liquidity, which may limit our access to funds, lead to shortages of cash or increase the cost of raising funds. |
• | An adverse impact on our ability to engage in new, or consummate pending, strategic transactions on the agreed terms and timetable or at all. |
(1) | Indicates approximate shareholding. |
(2) | Indicates approximate shareholding, including the 291,518,000 H Shares indirectly held by CNPC as of December 31, 2021 through Fairy King Investments Limited, a wholly owned overseas subsidiary of CNPC. |
(3) | Includes PetroChina Exploration & Development Research Institute, PetroChina Planning & Engineering Institute, PetroChina Petrochemical Research Institute and several other companies. |
* | Our major subsidiaries, all included in the chart above, are classified into different business segments based on the nature of their principal business activities. See Note 18 to our financial statements for a detailed discussion on this. Other than the major subsidiaries, companies in which we have equity interest mainly include China Oil & Gas Pipeline Network Corporation, CNPC Finance Co., Ltd., CNPC Captive Insurance Company Limited and other associate companies and joint ventures as well as other equity investments measured at fair value through other comprehensive income. See Note 16 and Note 17 to our financial statements for a detailed discussion. |
Year Ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
Revenue (RMB in millions) |
676,320 | 530,807 | 688,334 | |||||||||
Profit from operations (RMB in millions) |
96,097 | 23,092 | 68,452 | |||||||||
Proved developed and undeveloped reserves Crude oil (million barrels) |
7,253.3 | 5,206.1 | 6,063.8 | |||||||||
Natural gas (Bcf) |
76,236.0 | 76,437.1 | 74,915.9 | |||||||||
Production |
||||||||||||
Crude oil (million barrels) |
909.3 | 921.8 | 887.9 | |||||||||
Natural gas for sale (Bcf) |
3,908.0 | 4,221.0 | 4,420.0 |
Crude Oil and Condensate (1) |
Natural Gas (2) |
Combined |
||||||||||
(Million barrels) |
(Bcf) |
(BOE, in millions) |
||||||||||
Proved developed and undeveloped reserves |
||||||||||||
On a consolidated basis: |
||||||||||||
Reserves as of December 31, 2018 |
7,640.8 | 76,467.0 | 20,385.3 | |||||||||
Revisions of previous estimates |
(49.7 | ) | (765.6 | ) | (177.1 | ) | ||||||
Extensions and discoveries |
480.6 | 4,442.6 | 1,221.0 | |||||||||
Improved recovery |
90.9 | — | 90.9 | |||||||||
Production for the year |
(909.3 | ) | (3,908.0 | ) | (1,560.8 | ) | ||||||
Reserves as of December 31, 2019 |
7,253.3 | 76,236.0 | 19,959.3 | |||||||||
Revisions of previous estimates |
(1,553.1 | ) | (595.3 | ) | (1,652.2 | ) | ||||||
Extensions and discoveries |
385.2 | 4,976.1 | 1,214.6 | |||||||||
Improved recovery |
107.7 | — | 107.7 | |||||||||
Purchased |
15.0 | 106.9 | 32.8 | |||||||||
Sold |
(80.2 | ) | (65.6 | ) | (91.1 | ) | ||||||
Production for the year |
(921.8 | ) | (4,221.0 | ) | (1,625.5 | ) | ||||||
Reserves as of December 31, 2020 |
5,206.1 | 76,437.1 | 17,945.6 | |||||||||
Revisions of previous estimates |
1,159.1 | (2,011.6 | ) | 824.1 |
Crude Oil and Condensate (1) |
Natural Gas (2) |
Combined |
||||||||||
(Million barrels) |
(Bcf) |
(BOE, in millions) |
||||||||||
Extensions and discoveries |
472.3 | 4,885.3 | 1,286.5 | |||||||||
Improved recovery |
116.7 | 27.0 | 121.2 | |||||||||
Purchased |
— | — | — | |||||||||
Sold |
(2.5 | ) | (1.9 | ) | (2.8 | ) | ||||||
Production for the year |
(887.9 | ) | (4,420.0 | ) | (1,624.8 | ) | ||||||
Reserves as of December 31, 2021 |
6,063.8 | 74,915.9 | 18,549.8 | |||||||||
Proved developed reserves |
||||||||||||
As of December 31, 2018 |
5,843.1 | 40,128.2 | 12,531.1 | |||||||||
Of which: domestic |
5,203.4 | 38,433.2 | 11,609.0 | |||||||||
Overseas |
639.7 | 1,695.0 | 922.1 | |||||||||
As of December 31, 2019 |
5,473.8 | 39,869.6 | 12,118.7 | |||||||||
Of which: domestic |
4,840.0 | 38,376.3 | 11,236.0 | |||||||||
Overseas |
633.8 | 1,493.3 | 882.7 | |||||||||
As of December 31, 2020 |
4,653.6 | 42,076.7 | 11,666.4 | |||||||||
Of which: domestic |
3,987.0 | 40,732.3 | 10,775.8 | |||||||||
Overseas |
666.6 | 1,344.4 | 890.6 | |||||||||
As of December 31, 2021 |
5,374.8 | 42,575.6 | 12,470.7 | |||||||||
Of which: domestic |
4,799.6 | 41,343.5 | 11,690.2 | |||||||||
Overseas |
575.2 | 1,232.1 | 780.5 | |||||||||
Proved undeveloped reserves |
||||||||||||
As of December 31, 2018 |
1,797.7 | 36,338.8 | 7,854.2 | |||||||||
Of which: domestic |
1,626.4 | 36,046.9 | 7,634.2 | |||||||||
Overseas |
171.3 | 291.9 | 220.0 | |||||||||
As of December 31, 2019 |
1,779.5 | 36,366.4 | 7,840.6 | |||||||||
Of which: domestic |
1,659.8 | 36,156.8 | 7,686.0 | |||||||||
Overseas |
119.7 | 209.6 | 154.6 | |||||||||
As of December 31, 2020 |
552.5 | 34,360.4 | 6,279.2 | |||||||||