PetroChina Co. passed Exxon Mobil Corp. today as the biggest energy company by market value for the first time since 2010.
As the attached chart shows, Exxon's capitalization was $352.6 billion through yesterday, compared with PetroChina's $352.8 billion as of 1:36 p.m. on Thursday in Shanghai. The Chinese company's A shares surged about 61 percent the past year, versus Exxon's 14 percent drop. PetroChina was larger by value most recently at the close of trading on June 25, 2010, data compiled by Bloomberg show.
The Shanghai Composite Index has gained about 88 percent over the past year, the best performance among major indexes tracked by Bloomberg, amid speculation the central bank will extend cuts in borrowing costs and on increased use of leverage to buy stocks. The Chinese yuan has declined 0.1 percent versus the dollar the past year even as most currencies weakened.
“PetroChina has multiple positives at the moment: it's got a reform story, it's also listed in Hong Kong, and China has more freedom for mainland fund managers in the works," said Mark Matthews, head of Asia research and a managing director of Bank Julius Baer & Co. in Singapore. “China is also planning to transfer stakes in state-owned enterprises away from their regulator, which will on the whole be positive for SOEs."
Earnings of both companies have been squeezed by the plunge in the price of oil. Exxon's adjusted net income of $6.3 billion in the fourth quarter was the lowest since a loss in the final three months of 2009, according to data compiled by Bloomberg. PetroChina's profit was 11.1 billion yuan ($1.8 billion) in the same period.
Almost all the operating profit in 2014 of PetroChina, which is 86.5 percent owned by state-controlled China National Petroleum Corp., came from the exploration and production sector, with small contributions from its natural gas and pipeline unit. The refining and chemicals unit had an operating loss last year.