Oct. 24 (Bloomberg) -- PetroChina Co., the nation's biggest oil producer, may raise as much as 66.8 billion yuan ($8.9 billion) selling shares in Shanghai to expand refineries and output at oilfields, the company said in a stock exchange filing.
The company will sell shares at the price range of 15 yuan to 16.7 yuan each, according to the statement to the Hong Kong stock exchange. PetroChina said in a Oct. 21 share sale document that it will sell as many as 4 billion yuan-denominated shares in its Shanghai listing.
Surging energy demand has pushed PetroChina's share price up more than 15-fold since its Hong Kong listing in 2000, making the Beijing-based company the world's second largest by market value. The Shanghai sale gives investors in mainland China, home to the best-performing equity market this year, their first opportunity to buy the stock directly.
PetroChina slipped 0.21 percent in Hong Kong trading to HK$19.40 before the announcement. The stock has gained 76 percent this year, more than the 47 percent increase in the benchmark Hang Seng Index. The stock is set to start trading in Shanghai Nov. 5, PetroChina said Oct. 21.
If priced at the top end, the sale would surpass the 66.6 billion yuan generated by China Shenhua Energy Co. earlier this month and making it the world's largest stock offer this year.
The oil producer said Sept. 20 it plans to use 37.77 billion yuan of the funds raised in the Shanghai share sale for refinery and oilfield projects. The company will spend 17.5 billion yuan upgrading the Dushanzi refinery in the northwestern region of Xinjiang, it said.
Expansion Plans
PetroChina will spend 12.8 billion yuan to boost production capacity at its Changqing and Daqing fields, it said in its listing prospectus. The Beijing-based explorer and refiner will use 1.5 billion yuan to develop part of the Jidong Nanpu field, China's biggest oil discovery in almost 50 years, and 6 billion yuan to expand an ethylene plant at Daqing.
Oil and gas output increased by 5.6 percent in the third quarter at PetroChina, outpacing growth at Royal Dutch Shell Plc and Chevron Corp.
Total spending may jump 24 percent to $24.5 billion this year, PetroChina said in March. That is higher than Exxon Mobil Corp. and Europe's two largest oil companies, Shell and BP Plc.
Billionaire investor Warren Buffett's Berkshire Hathaway Inc. sold its entire stake in PetroChina, Buffett said in an interview on Fox Business Network Oct. 18. Berkshire was PetroChina's biggest shareholder after state-owned China National Petroleum Corp., holding more than 2.3 billion PetroChina shares as of the end of last year.
Berkshire bought its stake for less than HK$1.70 a share in April 2003. Activists have urged Buffett and other investors to divest PetroChina holdings over links to Sudan, whose government the U.S. accuses of supporting genocide. The decision to sell was ``100 percent'' based on share price, Buffett said.
UBS AG's China venture, UBS Securities Co., Citic Securities Co. and China International Capital Corp. are arranging the share sale.
