PetroChina The World's Biggest Company

PetroChina became the world's biggest company, in terms of market value, on its first day of trading on the Shanghai stock exchange on 5 November.

With A-share stocks PetroChina's total market value topped US$1.1 trillion, nearly double that of Exxon Mobil, the US oil giant and the world's former largest firm by market value.

However, share prices dropped by 30 per cent in the following week. The initial boom may have been partly due to the fact that just 2.2 per cent of PetroChina's shares were on offer, said Wang Weigang, chief analyst of Shanghai-based Northeast Securities.

Although PetroChina and CNPC did not comment on the share listing, the CNPC website posted an interview with Wang Zhen, dean of the business school at China University of Petroleum (CUP), Beijing, saying that it will make Chinese investors care more about the company's operation, stimulating the company to improve its management.

Wang Weigang added that the market's enthusiastic welcome for the oil and energy industry should stimulate further growth. 'Although PetroChina's capitalisation is only about $8.98 billion, it can choose to sell more shares in the future to get more money for its future exploration,' he said.

Another Chinese oil giant, China National Offshore Oil Corporation (CNOOC), which is now listed in the New York Stock Exchange, also plans to return to China's A-share market. A senior CNOOC official, who declined to be named, told Chemistry World that PetroChina's listing has encouraged the company to hasten its own domestic listing, although the timing and size of the eventual share offer will be decided by the stock market regulators.

Despite the zealous embrace by the market, Ma Hong, a senior researcher at CUP, said that PetroChina could not yet be considered equivalent to leading players like Exxon Mobil. 'If it is to become a truly international leader, the government should reform the system to allow State-owned firms to shake off burdens like price control,' he said.