SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of December 2007
PETROCHINA COMPANY LIMITED
16 ANDELU, DONGCHENG DISTRICT
BEIJING, THE PEOPLE'S REPUBLIC OF CHINA, 100011
(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.)
Form 20-F X Form 40-F
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(Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes No X
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(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- )
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PetroChina Company Limited (the "Registrant") is furnishing under the cover
of Form 6-K the Registrant's announcement regarding its connected transaction.
The Stock Exchange of Hong Kong Limited takes no responsibility for the contents
of this announcement, makes no representation as to its accuracy or completeness
and expressly disclaims any liability whatsoever for any loss howsoever arising
from or in reliance upon the whole or any of the contents of this announcement.
(PETROCHINA COMPANY LIMITED LOGO)
PETROCHINA COMPANY LIMITED
(a joint stock limited company incorporated in
the People's Republic of China with limited liability)
(Stock Code: 857)
CONNECTED TRANSACTION
Reminder
The Company and all members of its board of directors warrant the authenticity,
accuracy and completeness of the information contained in this announcement, and
jointly and severally accept full responsibility for any misrepresentation,
misleading statements or material omission contained in this announcement.
The board of directors of the Company is pleased to announce that on 27 December
2007, the Company entered into the "Capital Injection Agreement Concerning CNPC
Exploration and Development Company Limited" with CNODC and CNPC E&D (a
subsidiary of the Company) pursuant to which the Company and CNODC, as
shareholders of CNPC E&D, shall inject capital in the aggregate amount of RMB16
billion (approximately HK$16,944 million) into CNPC E&D. The Company and CNODC
shall each make a capital injection of RMB8 billion (approximately HK$8,472
million) in cash, payable in one lump sum. Upon completion of the Capital
Injection, the Company and CNODC will continue to hold 50% of the shares of CNPC
E&D respectively.
As CNODC is a wholly-owned subsidiary of China National Petroleum Corporation,
the controlling shareholder of the Company, CNODC is a connected person of the
Company pursuant to the Shanghai Listing Rules and the Hong Kong Listing Rules.
As CNODC holds 50% of the shares of CNPC E&D, CNPC E&D is also a connected
person of the Company under the Hong Kong Listing Rules. Therefore, the Capital
Injection by the Company and CNODC into CNPC E&D constitutes a connected
transaction of the Company under the Shanghai Listing Rules and the Hong Kong
Listing Rules.
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1. SUMMARY OF CONNECTED TRANSACTION
PetroChina Company Limited (the "COMPANY") convened an extraordinary
meeting of the 3rd Session of its board of directors on 27 December 2007 at
which the resolution in respect of the "Capital Injection Agreement Concerning
CNPC Exploration and Development Company Limited" was considered and approved.
On 27 December 2007, the Company entered into the "Capital Injection Agreement
Concerning CNPC Exploration and Development Company Limited" with China National
Oil and Gas Exploration and Development Corporation ("CNODC") and CNPC
Exploration and Development Company Limited ("CNPC E&D") pursuant to which the
Company and CNODC, as shareholders of CNPC E&D, shall inject capital in the
aggregate amount of RMB16 billion (approximately HK$16,944 million) into CNPC
E&D. The Company and CNODC shall each make a capital injection of RMB8 billion
(approximately HK$8,472 million) in cash, payable in one lump sum (the "CAPITAL
INJECTION"). Upon completion of the Capital Injection, the Company and CNODC
will continue to hold 50% of the shares of CNPC E&D respectively. The funds
required to finance the Capital Injection by the Company will come from its
internal resources.
As CNODC is a wholly-owned subsidiary of China National Petroleum
Corporation, the controlling shareholder of the Company, CNODC is a connected
person of the Company pursuant to the Listing Rules of the Shanghai Stock
Exchange (the "SHANGHAI LISTING RULES") and the Listing Rules of The Stock
Exchange of Hong Kong Limited (the "HONG KONG LISTING RULES"). As CNPC E&D is a
non wholly-owned subsidiary of the Company and CNODC holds 50% of the shares of
CNPC E&D, CNPC E&D is also a connected person of the Company under the Hong Kong
Listing Rules. Therefore, the Capital Injection by the Company and CNODC into
CNPC E&D constitutes a connected transaction of the Company under both the
Shanghai Exchange Listing Rules and the Hong Kong Listing Rules.
2. REGULATORY REQUIREMENTS
Pursuant to the Shanghai Listing Rules, the amount of the Capital Injection
is less than 5% of the latest audited net asset value of the Company. Pursuant
to the Hong Kong Listing Rules, the applicable percentage ratios for the Capital
Injection are more than 0.1% but less than 2.5%. Accordingly, the Capital
Injection shall comply with the reporting and public announcement requirements
under Rule 10.2.4 of the Shanghai Listing Rules and Rule 14A.32 of the Hong Kong
Listing Rules respectively, but shall not require the approval of the
independent shareholders of the Company. Therefore, the Capital Injection will
become effective upon approval of the board of directors of the Company.
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3. DESCRIPTION OF CONNECTED PERSONS
(i) CNODC
CNODC was established on 14 September 1984 with registered capital of
RMB4,177,401,000. Its place of establishment is Beijing, China. CNODC is a
collectively-owned enterprise within China National Petroleum Corporation. CNODC
is principally engaged in the exploration, development and production of oil and
natural gas. It undertakes contracts for overseas oil and natural gas projects
and participates in bidding for domestic and international projects. As at 31
December 2006, the value of the total assets of CNODC was RMB59,253,162,900 and
its net asset value was RMB33,419,520,600. The realized net profit of CNODC for
2006 was RMB4,564,336,600. As at 30 June 2007, the value of the total assets and
net asset value of CNODC were RMB58,425,820,000 and RMB37,800,000,000
respectively. The realized net profit of CNODC for the period from January to
June 2007 was RMB2,632,320,000. The figures relating to CNODC are unaudited.
(ii) CNPC E&D
Please refer to the section headed "4. General information about the target
company" of this announcement for general information on CNPC E&D.
4. GENERAL INFORMATION ABOUT THE TARGET COMPANY
(i) General information
CNPC E&D was established on 14 March 2005 with registered capital of
RMB100,000,000. On 9 June 2005, the Company entered into an agreement in respect
of capital injection into CNPC E&D and became a shareholder of CNPC E&D. The
Company and CNODC are existing shareholders of CNPC E&D, each holding 50% of its
shares. The business of CNPC E&D includes the development of exploration
technologies for exploration of oil and gas fields, investment in crude oil,
natural gas and chemical refining projects, investment in crude oil, natural gas
and oil product pipeline projects, undertaking contracts for oil operations and
services, import and export of goods or technologies, undertaking import and
export agency business, provision of foreign trade consulting services and
technological exchange services, as well as sale of equipment, instrument,
meters, parts and components, cement materials, crude oil, chemical products for
use in oil fields and petrochemical products (excluding toxic products that can
be readily manufactured including hazardous chemical catalysts).
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The principal business of CNPC E&D is the undertaking of international
exploration and production of oil and gas through special purpose vehicles. It
has operations in various countries including Algeria, the Republic of
Kazakhstan, Oman, Niger, Chad, Canada, Azerbaijan, Ecuador, Peru, Venezuela,
China and Indonesia.
(ii) Financial information
The following table sets out the unaudited financial information of CNPC
E&D as at and for the two years ended 31 December 2005 and 31 December 2006 and
the six months ended 30 June 2007 respectively:
(Unit: RMB Million)
31 December 2005 31 December 2006 30 June 2007
Generally Accepted Accounting Principles in the PRC
Total assets 50,608 49,771 53,238
Net asset 29,137 33,853 38,269
Net profit before tax 10,847 12,476 8,030
Net profit after tax 7,068 7,324 6,001
International Financial Reporting Standards
Total assets 60,133 60,244 63,839
Net asset 35,551 41,468 45,961
Net profit before tax 12,539 15,002 8,581
Net profit after tax 8,201 8,705 6,285
CNPC E&D has been classified as a subsidiary of the Company and its results
have been consolidated in the consolidated financial statements of the Company
before the Capital Injection and will continue to be so consolidated after the
Capital Injection.
5. PURPOSE OF THE CAPITAL INJECTION
(i) Summary
At present, CNPC E&D intends to co-operate with two state-owned development
companies respectively in the Republic of Kazakhstan ("KAZAKHSTAN") and the
Republic of Uzbekistan ("UZBEKISTAN") and invest in the development and
construction of a Central Asia
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- China natural gas pipeline project for the transmission of natural gas
purchased by China from the Republic of Turkmenistan ("TURKMENISTAN"). For this
purpose, CNPC E&D has established a wholly-owned subsidiary, Trans-Asia Gas
Pipeline Company Limited ("TRANS-ASIA GAS"), which acts as the platform for
undertaking this natural gas pipeline development and construction project. As
CNPC E&D requires substantial funding to undertake the project, each of the
Company and CNODC, as shareholders of CNPC E&D, proposes to inject additional
capital of RMB8 billion (approximately HK$8,472 million) into CNPC E&D, totaling
RMB16 billion (approximately HK$16,944 million) to satisfy such funding
requirement. During the year prior to the Capital Injection, the Company and
CNODC have not made any capital contribution into CNPC E&D.
(ii) Brief introduction of the Central Asia - China natural gas pipeline
project
The Central Asia - China natural gas pipeline stretches from Gedaim, which
is at the border of Turkmenistan and Uzbekistan, runs across Uzbekistan and
Kazakhstan and reaches Khorgos in China. The pipeline will be 1,818 km long, of
which 525 km will run through Uzbekistan and 1,293 km will run through
Kazakhstan. The diameter of the pipeline will be 1,067 mm. A dual-laid pipeline
will be installed. The designed gas transmission capacity will be 30 billion
cubic meters per annum, which is capable to be increased to 40 billion cubic
meters per annum. The total project investment is estimated to be US$7.31
billion.
The target markets for gas transmitted through the Central Asia - China
natural gas pipeline into China include the Central-western provinces such as
Xinjiang, Gansu, Ningxia, Shaanxi and Sichuan, the Central-southern provinces
such as Henan, Anhui, Hubei, Hunan and Jiangxi, the Yangtze River Delta region
including Shanghai and the Jiangsu and Zhejiang provinces, and the South-eastern
coastal provinces such as Guangdong and Guangxi.
On 8 November 2007, CNPC E&D established Trans-Asia Gas, a wholly-owned
subsidiary, to undertake the above project. Trans-Asia Gas will set up a
Chinese-Uzbekistan equity joint venture and a Chinese-Kazakhstan equity joint
venture with the state-owned development company of each of Uzbekistan and
Kazakhstan for the purposes of undertaking the project. Applications for
obtaining the approval and confirmation from relevant governmental authorities
in China are currently underway. If the formation of these two joint ventures
shall trigger any compliance requirements under the Shanghai Listing Rules
and/or Hong Kong Listing Rules, the Company will comply with such requirements
at appropriate times.
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6. KEY CONTENTS OF THE CAPITAL INJECTION AGREEMENT AND CONSIDERATION
(i) Key contents of the agreement
1. The agreement concerning the Capital Injection as a connected
transaction, namely the "Capital Injection Agreement Concerning CNPC Exploration
and Development Company Limited", will be entered into between the Company,
CNODC and CNPC E&D.
2. The registered capital of CNPC E&D will be increased by RMB16 billion
(approximately HK$16,944 million), with the Company and CNODC each injecting
RMB8 billion in cash. Within 7 working days from the signing of the capital
injection agreement, the Company and CNODC shall pay their respective capital
contribution in full in one lump sum into an account designated by CNPC E&D.
3. The agreement will be executed after each party has obtained its
internal approval and will become effective upon signing.
(ii) Consideration
For the Capital Injection, the Company and CNODC will each inject RMB8
billion (approximately HK$8,472 million) payable in one lump sum in cash. Upon
the Capital Injection, the percentage of equity interest of the Company and
CNODC in CNPC E&D will remain to be 50%: 50%.
7. EFFECT OF THE TRANSACTION ON THE COMPANY
(i) Due to the continuous rapid economic growth in China, there is
substantial demand for energy resources. The demand for clean energy
is particularly strong. The Capital Injection will increase the
international reach of the business of the Company through the
overseas operations of CNPC E&D. It will also increase the market
share of the Company in the domestic natural gas market. This presents
new opportunities to boost the financial performance of the Company.
(ii) The investment resulting from the Capital Injection is an important
strategic project for the supply of oil and gas to China. It will also
safeguard a constant supply of natural gas to China. The Company's
investment in this project represents an important opportunity for the
Company, as a reputable international and domestic company, to
strengthen its corporate image as a socially responsible company.
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(iii) The Company's investment in this project will further enhance its
collaborations with state-owned development companies in Central-
Asian countries, which will further strengthen the development of the
Company's business in this region.
8. DIRECTORS' OPINION
The Company convened an extraordinary meeting of the 3rd Session of its
board of directors by way of written resolutions on 27 December 2007. Eleven
directors participated in the meeting. The Chairman of the Company, Mr. Jiang
Jiemin, and certain directors of the Company, namely Mr. Duan Wende, Mr. Zhou
Jiping, Mr. Wang Yilin and Mr. Zeng Yukang, also held positions in China
National Petroleum Corporation and therefore, as related parties, have abstained
from voting in respect of the resolution approving the connected transaction.
The remaining six directors of the Company (including the independent
non-executive directors) who are entitled to attend and vote at such resolution
considered and unanimously passed the resolution concerning the Capital
Injection. The number of directors who are entitled to attend and vote at such
resolution was in compliance with the quorum requirement and accordingly the
convening of the meeting and the passing of the resolution were valid and
effective.
The independent non-executive directors of the Company are of the view that
the connected transaction has been carried out in the usual and ordinary course
of business of the Company and in compliance with the requirements under
relevant laws, administrative regulations, departmental rules, regulatory
documents, regulations of the places of listing and the articles of association
of the Company. The connected transaction has been entered into on normal
commercial terms which are fair and reasonable to the Company and its
shareholders as a whole and in the best interest of the Company and its
shareholders as a whole. The other voting directors also agreed with the
aforesaid views.
9. INFORMATION ABOUT THE COMPANY
The Company and its subsidiaries are principally engaged in petroleum and
natural gas related activities, including:
(i) the exploration, development, production and sale of crude oil and
natural gas;
(ii) the refining, transportation, storage and marketing of crude oil and
petrochemical products;
(iii) the production and sales of basic petrochemical products, derivative
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petrochemical products and other chemical products; and
(iv) the transmission of natural gas and crude oil, and the sales of
natural gas.
In this announcement, Renminbi has been translated into Hong Kong dollars at the
rate of RMB1 to HK$1.059 for reference purpose only.
BY ORDER OF THE BOARD OF DIRECTORS
PETROCHINA COMPANY LIMITED
27 December 2007
As at the date of this announcement, the board of directors of the Company
comprises Mr. Jiang Jiemin as the Chairman; Mr. Duan Wende as the executive
director; Mr. Zheng Hu, Mr. Zhou Jiping, Mr. Wang Yilin, Mr. Zeng Yukang, Mr.
Gong Huazhang and Mr. Jiang Fan as non-executive directors; and Mr. Chee-Chen
Tung, Mr. Liu Hongru and Mr. Franco Bernabe as independent non-executive
directors.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PetroChina Company Limited
Dated: December 28, 2007 By: /s/ Li Huaiqi
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Name: Li Huaiqi
Title: Secretary to the Board