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 September 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
--- ---
(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
--- ---
(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- ) -------
PetroChina Company Limited (the "Registrant") is furnishing under the cover
of Form 6-K the Registrant's announcement regarding its proposed A Share Issue
and reconciliation of financial information from PRC GAAP to IFRS.
This announcement contains "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
are, by their nature, subject to significant risks and uncertainties. These
forward-looking statements include, without limitation, statements relating to
the Registrant's plan regarding the use of proceeds from A Share Issue.
These forward-looking statements reflect our current views with respect to
future events and are not a guarantee of future performance. Actual results may
differ materially from information contained in these forward-looking statements
as a result of a number of factors.
We do not intend to update or otherwise revise the forward-looking
statements in this announcement, whether as a result of new information, future
events or otherwise. Because of these risks, uncertainties and assumptions, the
forward-looking events and circumstances discussed in this announcement might
not occur in the way we expect, or at all.
You should not place undue reliance on any of these forward-looking
statements.
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 part of the contents of this
announcement. This announcement does not constitute an offer or an invitation to
induce an offer by any person to acquire, subscribe for or purchase any
securities.
(PETROCHINA COMPANY LOGO)
(CHINESE CHARACTER)
PETROCHINA COMPANY LIMITED
(a joint stock limited company incorporated in the People's
Republic of China with limited liability)
(STOCK CODE: 857)
PROPOSED A SHARE ISSUE
AND
RECONCILIATION OF FINANCIAL INFORMATION FROM
PRC GAAP TO IFRS
PROPOSED A SHARE ISSUE
Reference is made to the announcement and circular of the Company dated 19 June
2007 and 25 June 2007, respectively. The Company has submitted a draft of the
Prospectus to the CSRC in connection with its application to proceed with the
proposed A Share Issue.
The Prospectus contains financial information of the Company for the Relevant
Periods and will be made available on the CSRC and Hong Kong Stock Exchange's
website after close of trading on the Hong Kong Stock Exchange on 20 September
2007. To ensure the timely release of such financial information in Hong Kong
and to enable Shareholders and investors to better understand the material
differences between the financial information of the Company for the Relevant
Periods prepared under PRC GAAP and those prepared under IFRS (the basis on
which the figures in the consolidated financial statements incorporated in the
Company's published annual reports for the three years ended 31 December 2004,
2005 and 2006 and the published interim report for the six months ended 30 June
2007 were prepared), this announcement presents the reconciliation of the net
profit/net assets of the Company prepared under PRC GAAP to the net profit/net
assets of the Company prepared under IFRS for the Relevant Periods.
This announcement also presents the consolidated financial information of the
Company for the Relevant Periods prepared under PRC GAAP.
THE PROPOSED A SHARE ISSUE IS SUBJECT TO APPROVAL BY THE CSRC. THERE IS NO
ASSURANCE THAT THE A SHARE ISSUE WILL PROCEED. INVESTORS ARE ADVISED TO EXERCISE
CAUTION IN DEALING IN THE H SHARES. FURTHER DETAILS ABOUT THE A SHARE ISSUE WILL
BE DISCLOSED BY THE COMPANY IN NEWSPAPERS IN THE PRC AND THE WEBSITES OF THE
SHANGHAI STOCK EXCHANGE AND THE COMPANY WHEN THE A SHARE ISSUE MATERIALIZES AND
THE RELEVANT INFORMATION WILL BE DISCLOSED BY THE COMPANY IN HONG KONG
CONCURRENTLY IN ACCORDANCE WITH THE LISTING RULES.
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1. PROPOSED A SHARE ISSUE
Reference is made to the Company's announcement dated 19 June 2007 and the
circular to the Shareholders dated 25 June 2007, respectively, in respect
of the proposed A Share Issue. Unless otherwise indicated, capitalized
terms used in this announcement shall have the same meaning as those
defined in the said circular.
The Company has submitted a draft of the Prospectus to the CSRC in
connection with its application to proceed with the proposed A Share Issue.
The Prospectus will be made available on the CSRC and Hong Kong Stock
Exchange's website after close of trading on the Hong Kong Stock Exchange
on 20 September 2007.
The proposed A Share Issue will comprise the issue of not more than 4
billion A Shares to the individuals, entities and other institutions
according to the PRC laws and regulations and other regulatory requirements
that the Company is required to comply with, by way of public offering of
new shares according to the Prospectus. The issue price for the proposed A
Share Issue will be based on the indicative offer price range to be
determined by the Company and the joint lead underwriters of the proposed A
Share Issue in accordance with preliminary market consultation with price
consultation parties, after which the issue price will be determined within
the indicative price range based on offline book-build price consultation
with the placing parties.
THE PROPOSED A SHARE ISSUE IS SUBJECT TO APPROVAL BY THE CSRC. THERE IS NO
ASSURANCE THAT THE A SHARE ISSUE WILL PROCEED. INVESTORS ARE ADVISED TO
EXERCISE CAUTION IN DEALING IN THE H SHARES. FURTHER DETAILS ABOUT THE A
SHARE ISSUE WILL BE DISCLOSED BY THE COMPANY IN NEWSPAPERS IN THE PRC AND
THE WEBSITES OF THE SHANGHAI STOCK EXCHANGE AND THE COMPANY WHEN THE A
SHARE ISSUE MATERIALIZES AND THE RELEVANT INFORMATION WILL BE DISCLOSED BY
THE COMPANY IN HONG KONG CONCURRENTLY IN ACCORDANCE WITH THE LISTING RULES.
2
2. FINANCIAL INFORMATION OF THE COMPANY FOR THE RELEVANT PERIODS PREPARED
UNDER PRC GAAP
CONSOLIDATED BALANCE SHEET PREPARED UNDER PRC GAAP
Amounts in RMB millions
JUNE 30, December 31, December 31, December 31,
Assets 2007 2006 2005 2004
Current Assets
Cash at bank and in hand ................................. 77,191 54,070 86,024 12,704
Notes receivable ......................................... 4,606 2,844 3,028 4,824
Accounts receivable ...................................... 16,399 8,488 4,630 2,662
Advance to suppliers ..................................... 25,995 12,664 12,593 10,779
Interest receivable ...................................... 65 81 8 --
Dividends receivable ..................................... 690 13 174 109
Other receivables ........................................ 12,828 10,515 9,261 40,066
Inventories .............................................. 84,327 76,038 62,733 45,771
Other current assets ..................................... 6 4 58 --
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Total current assets ....................................... 222,107 164,717 178,509 116,915
Non-current assets
Available-for-sale financial assets ...................... 2,292 1,860 1,028 1,400
Long-term equity investments ............................. 29,595 30,361 10,389 7,546
Fixed assets ............................................. 232,148 231,590 215,518 196,634
Oil and gas properties ................................... 262,804 270,496 231,318 186,718
Construction in progress ................................. 82,407 64,652 51,582 34,338
Construction materials ................................... 6,006 8,664 3,651 2,463
Fixed assets pending disposal ............................ 280 279 268 229
Intangible assets ........................................ 16,504 16,127 13,250 10,306
Long-term prepaid expenses ............................... 11,568 11,194 8,270 5,286
Deferred tax assets ...................................... 12,949 14,391 10,515 7,728
Other non-current assets ................................. 813 813 1,116 1,495
=======
Total non-current assets ................................... 657,366 650,427 546,905 454,143
-------
Total assets ............................................... 879,473 815,144 725,414 571,058
-------
3
JUNE 30, December 31, December 31, December 31,
Liabilities and equity 2007 2006 2005 2004
Current liabilities
Short-term loans ................................... 15,833 15,156 13,364 11,268
Notes payable ...................................... 856 1,045 829 1,810
Accounts payable ................................... 83,808 77,936 53,274 37,865
Advances from customers ............................ 10,204 11,590 10,142 7,207
Salaries and welfare payable ....................... 12,594 11,368 9,670 7,382
Taxes and levies payable ........................... 22,670 24,174 25,171 22,809
Interest payable ................................... 236 200 148 66
Dividends payable .................................. 85 95 122 38
Other payables ..................................... 29,241 18,367 25,385 17,278
Provisions ......................................... 114 115 120 88
Current portion of non-current ..................... 11,900 20,407 15,230 15,942
liabilities
Other current liabilities .......................... 13 12 15 --
Total current liabilities ............................ 187,554 180,465 153,470 121,753
Non-current liabilities
Deferred income .................................... 17 -- -- --
Long-term loans .................................... 37,497 30,401 39,630 35,608
Debentures payable ................................. 4,597 4,645 4,280 2,850
Long-term payables ................................. 50 50 50 51
Grants payable ..................................... 675 737 755 456
Provisions ......................................... 19,186 18,481 14,187 --
Deferred tax liabilities ........................... 11,628 12,480 12,533 7,154
Other non-current liabilities ...................... 133 290 275 332
-------
Total non-current liabilities ........................ 73,783 67,084 71,710 46,451
-------
Total liabilities .................................... 261,337 247,549 225,180 168,204
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Equity
Share capital ...................................... 179,021 179,021 179,021 175,824
Capital surplus .................................... 59,733 59,797 61,963 53,790
Statutory common reserve fund ...................... 89,928 89,928 76,573 57,575
Retained earnings .................................. 261,443 213,255 158,970 106,356
Currency translation differences ................... (666) (534) (289) --
Equity attributable to equity
holders of the Company ............................. 589,459 541,467 476,238 393,545
Minority Interest .................................... 28,677 26,128 23,996 9,309
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Total Equity ......................................... 618,136 567,595 500,234 402,854
-------
Total liabilities and equity ......................... 879,473 815,144 725,414 571,058
-------
4
CONSOLIDATED INCOME STATEMENT UNDER PRC GAAP
Amounts in RMB million
SIX MONTHS
ENDED JUNE 30, Years ended December 31,
2007 2006 2005 2004
1. Turnover ............................................ 392,726 688,978 552,229 388,633
Less: Cost of operations ............................ (223,140) (362,590) (276,622) (179,880)
Taxes and levies on
operations .................................. (26,853) (51,692) (19,768) (16,370)
Selling expenses .............................. (19,075) (35,050) (28,381) (20,171)
General and
administrative expenses ..................... (21,475) (44,429) (36,284) (24,895)
Financial expenses, net ....................... (1,656) (1,322) (833) (1,308)
Loss of impairment
on assets ................................... 2,317 (2,914) (2,758) (5,279)
Add: Investment income ............................. 3,090 1,344 1,786 982
Including: share of profit
of associates and jointly
controlled entities ......................... 2,593 1,253 1,628 1,344
2. Operating profit .................................... 105,934 192,325 189,369 141,712
Add: Non-operating income .......................... 1,441 1,645 1,341 2,434
Less: Non-operating expenses ........................ (1,081) (4,180) (5,681) (5,134)
Including: loss on disposal
of non-current assets ..................... (289) (1,962) (2,333) (3,481)
3. Total profit ........................................ 106,294 189,790 185,029 139,012
Less: Income taxes ................................. (25,997) (47,043) (51,785) (40,048)
4. Net profit(i) ....................................... 80,297 142,747 133,244 98,964
Profit attributable to equity
holders of the Company ............................ 75,882 136,229 127,867 97,281
Minority interest ................................... 4,415 6,518 5,377 1,683
5. Earnings per share (based on the
profit attributable to equity
holders of the Company)
Basic earnings per share .......................... 0.42 0.76 0.72 0.55
Diluted earnings per share ........................ 0.42 0.76 0.72 0.55
----
(i) Profit of the subsidiaries acquired under common control from 1 January
2005 to the consolidation date in 2005 is RMB4,698 million.
5
3. RECONCILIATION OF NET PROFIT/NET ASSETS OF THE COMPANY PREPARED UNDER PRC
GAAP TO NET PROFIT/NET ASSETS OF THE COMPANY PREPARED UNDER IFRS
As part of the submission that the Company has made to the CSRC applying
for approval for the A Share Issue, a draft of the Prospectus was also
submitted to the CSRC which contains consolidated financial information of
the Company for the Relevant Periods prepared under PRC GAAP. To ensure the
timely release of the financial information as contained in the Prospectus
in Hong Kong and to enable Shareholders and investors to better understand
the material differences between the financial information of the Company
for the Relevant Periods prepared under PRC GAAP and those prepared under
IFRS (the basis on which the figures in the consolidated financial
statements incorporated in the Company's published annual reports for the
three years ended 31 December 2004, 2005 and 2006 and the published interim
report for the six months ended 30 June 2007 were prepared), this
announcement presents a reconciliation of the net profit/net assets of the
Company prepared under PRC GAAP to the net profit/net assets of the Company
prepared under IFRS for the Relevant Periods.
RECONCILIATION OF THE NET PROFIT/NET ASSETS OF THE COMPANY AS PER FINANCIAL
STATEMENTS FOR THE A SHARE ISSUE PURPOSE PREPARED UNDER PRC GAAP AND THE
FINANCIAL STATEMENTS PREPARED UNDER IFRS
The major differences between the financial statements for the A Share
Issue purpose prepared under PRC GAAP and the financial statements prepared
under IFRS are as follows:
(The financial statements for the three years ended 31 December 2004, 2005
and 2006 prepared under IFRS were audited by PricewaterhouseCoopers. The
financial statements for the six months ended 30 June 2007 prepared under
IFRS were not audited.)
6
RECONCILIATION OF NET PROFIT BETWEEN PRC GAAP AND IFRS
SIX MONTHS Year ended Year ended Year ended
ENDED 30 JUNE 31 December 31 December 31 December
2007 2006 2005 2004
Note RMB in millions
Net profit under PRC GAAP ............................... 80,297 142,747 133,244 98,964
Reconciliation items:
Depletion charges on oil and gas properties ........... (1) 3,899 9,173 8,763 7,481
Amortization charges on assets other than
fixed assets revalued in 1999 ....................... (2) 39 81 97 219
Depreciation charges on fixed assets revalued
in 2003 ............................................. (3) 80 111 (81) (185)
Prohibition of reversal of long-term assets'
impairment losses recognized in
previous periods .................................... (4) -- 4 54 155
Acquisition of the related refinery and
petrochemical businesses from Dayuan
Petrochemcial and Refinery and Qingyang
Petrochemical and Refinery ........................... (5) -- -- -- (137)
Acquisition of CNPC Exploration
and Development Company Limited* ..................... (6) -- -- -- 3,658
Others ................................................ 30 14 (40) 114
Deferred taxation ..................................... (7) 1,971 (2,733) (2,395) (2,623)
Net profit under IFRS ................................. 86,316 149,397 139,642 107,646
RECONCILIATION OF NET ASSETS BETWEEN PRC GAAP AND IFRS
SIX MONTHS Year ended Year ended Year ended
ENDED 30 JUNE 31 December 31 December 31 December
2007 2006 2005 2004
Note RMB in millions
Net assets under PRC GAAP ..................................... 618,136 567,595 500,234 402,854
Reconciliation items:
Depletion of oil and gas properties ......................... (1) 76,098 72,199 63,026 48,415
Amortization of assets other than fixed assets
revalued in 1999 .......................................... (2) (827) (866) (947) (1,044)
Depreciation of fixed assets
revalued in 2003 .......................................... (3) (419) (499) (610) (529)
Prohibition of reversal of long-term assets'
impairment loss recognized in previous periods ............ (4) 234 234 230 176
Acquisition of the relatedrefinery and
petrochemical businesses from Dayuan
Petrochemcial and Refinery and Qingyang
Petrochemical and Refinery ................................ (5) -- -- -- (212)
Acquisition of CNPC Exploration
and Development Company Limited* .......................... (6) -- -- -- 10,139
Others ...................................................... (494) (524) (393) (355)
Deferred taxation ........................................... (7) (19,364) (21,335) (18,602) (17,277)
Currency translation differences ............................ 723 787 729 805
Net assets under IFRS ......................................... 674,087 617,591 543,667 442,972
The basis and explanations for the reconciliation items between the
Company's financial
7
statements prepared under PRC GAAP and that under IFRS are as follows:
Note (1): Oil and gas properties are depleted using unit of production
method under IFRS but using straight-line method under PRC GAAP.
Note (2): The assets and liabilities transferred to the Company by CNPC
during the restructuring of CNPC in 1999 were appraised as at 30 June 1999
by China Enterprise Appraisals Co., Ltd*. All revaluation results were
recorded under PRC GAAP, but under IFRS, only fixed assets were measured at
revalued amounts, thus the revaluation results of assets other than fixed
assets were not recorded.
Note (3): Since the fixed assets were measured at revalued amounts under
IFRS, revaluations are required to be performed by independent qualified
valuers periodically. In order to meet this requirement under IFRS, as at
30 September 2003, a revaluation of the Company and its subsidiaries'
refinery and chemical production facilities was undertaken by China United
Assets Appraiser Co., Ltd*, a firm of independent valuers registered in the
PRC, on a depreciated replacement cost basis. The revaluation results were
recorded under IFRS, but under PRC GAAP, fixed assets were measured at
historical cost, thus the revaluation results were not recorded.
Note (4): Under PRC GAAP, the impairment losses recognized for long-term
assets such as fixed assets, oil and gas properties, intangible assets and
long-term investments in previous periods can not be reversed. But under
IFRS, if there is any indication that the factors which caused the
impairment losses may have changed, and the recoverable amounts of the
long-term assets exceed the carrying amounts, the impairment losses
recognized in previous periods can be reversed.
Note (5): The Company acquired 100% interests in Ningxia Dayuan Refinery
and Petrochemical Company Limited* ("DAYUAN PETROCHEMICAL AND REFINERY")
and Qingyang Refinery and Petrochemical Company Limited* ("QINGYANG
PETROCHEMICAL AND REFINERY") from CNPC. The balance sheet as of 1 January
2005 and the income statement for the year 2005 have been restated as if
the operations of the Company, Dayan Petrochemical and Refinery and
Qingyang Petrochemical and Refinery have always been combined in previous
accounting years, but the comparative information of 2004 is not
retrospectively adjusted. Under IFRS, this acquisition was recorded in a
manner similar to uniting of interests as if the operations of the Company
and these refinery and petrochemical businesses have always been combined
in the previous accounting years.
Note (6): The shareholders of the Company approved the acquisition in
August 2005
8
pursuant to which the Company agreed to acquire 50% interests in CNPC
Exploration and Development Company Limited* (CHINESE CHARACTER) ("CNPC
E&D"). The consolidation reference date for this transaction was 31
December 2005, the date that the Company obtained de facto control of CNPC
E&D. The balance sheet as of 1 January 2005 and the income statement for
the year 2005 have been restated as if the operations of the Company and
CNPC E&D have always been combined in previous accounting years, but the
comparative statistics of 2004 is not retrospectively adjusted. Under IFRS,
this acquisition was recorded in a manner similar to uniting of interests
as if the operations of the Company and CNPC E&D have always been combined
in the previous accounting years.
Note (7): The impact on the Company's deferred taxation arising from the
reconciliation items (1) to (6) above and other differences between
accounting standards.
4. USE OF PROCEEDS
The proceeds from the A Share Issue will be invested in the following
projects:
o approximately RMB6.84 billion will be used for production capacity
construction in Changqing oilfield;
o approximately RMB5.93 billion will be used for production capacity
construction in Daqing oilfield;
o approximately RMB1.50 billion will be used for production capacity
construction in Jidong oilfield;
o approximately RMB17.50 billion will be used for oil refining of
sulfur-bearing crude oil imported from Kazakhstan and ethylene
technology development projects by the Company's Dushanzi
Petrochemical; and
o approximately RMB6.00 billion will be used for the ethylene
development and expansion project by the Company's Daqing
Petrochemical (approximately 1.2 million tons/year).
If the proceeds from the A Share Issue (after deducting the listing
expenses) exceed the aggregate amount required for investments in the
projects described above, the excess portion will be used for working
capital purpose and general corporate purpose; if the proceeds from the A
Share Issue (after deducting the listing expenses) are insufficient for the
investments in the projects described above, the insufficient portion will
be funded by other methods such as bank borrowings or the Company's
internal cash resources.
5. CONVERSION OF DOMESTIC SHARES
After the listing of the Company's A Shares, the Domestic Shares of the
Company held by CNPC will become A Shares. If necessary and subject to the
necessary approval in the PRC, CNPC may list the Shares it holds in the
Company in the overseas stock exchanges.
DEFINITIONS
9
In this announcement, unless the context otherwise requires, the following terms
shall have the following meanings:
"CNPC" (CHINESE CHARACTER) (China National Petroleum Corporation*),
an enterprise incorporated under the laws of the PRC, and
the controlling shareholder of the Company
"IFRS" International Financial Reporting Standards
"PRC GAAP" the Accounting Standards for Business Enterprises issued by
the Ministry of Finance on 15 February 2006
"Prospectus" the prospectus to be issued by the Company in relation to
the proposed A Share Issue, a draft of which will be
available on the CSRC's website after close of trading on
the Hong Kong Stock Exchange on 20 September 2007
"Relevant Periods" the three years ended 31 December 2004, 2005 and 2006 and
the six months ended 30 June 2007
By Order of the Board
PETROCHINA COMPANY LIMITED
LI HUAIQI
Secretary to the Board
Beijing, the PRC
20 September 2007
As at the date of this announcement, the Board 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.
* For identification purpose only
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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: September 20, 2007 By: /s/ Li Huaiqi
------------------
Name: Li Huaiqi
Title: Company Secretary