PetroChina is the largest oil and gas producer in China and the second largest company in China in terms of revenue.^[1] PetroChina is an integrated oil and gas company whose operations include oil and gas exploration and production, refining, and the marketing and transportation of oil, refined products, natural gas, and other petrochemicals.^[2] The company’s largest segments are its refining and marketing segment and its exploration and production segment.

Because almost all of the company’s earnings come from oil and natural gas operations, Petrochina’s future revenues depend heavily on the price and consumption of natural gas and oil in China. PetroChina sells its oil and natural gas products at prices determined by the Chinese government.^[3] Although government set prices are not as susceptible to changes due to market conditions as oil sold in North America, government policies like fuel price caps and windfall taxes were partially responsible for the 22% decline in annual profits in 2008.^[4]

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