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 November 2008
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 with respect to the Board Resolution
on the acquisition of the assets and connected transaction.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this announcement to be signed on its behalf by
the undersigned, thereunto duly authorized.
PetroChina Company Limited
Dated: November 20, 2008 By: /s/ Li Huaiqi
------------------------------------
Name: Li Huaiqi
Title: Company Secretary
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)
(CHINESE CHARACTERS)
PETROCHINA COMPANY LIMITED
(a joint stock limited company incorporated in the People's Republic of China
with limited liability)
(STOCK CODE: 857)
CONNECTED TRANSACTION
ACQUISITION OF ASSETS
SPECIAL NOTICE
The Company and all Board members warrant the truthfulness, accuracy and
completeness of this announcement and jointly and severally accept full
responsibility for any misrepresentation or misleading statements contained in,
or material omissions from, this announcement.
SUMMARY OF IMPORTANT CONTENTS:
- Nature of transaction
The Resolution on the Acquisition of the Assets under the Risk Operation Service
Business under 6 Enterprises including Liaohe Petroleum Exploration Board was
considered and approved at the 3rd meeting of the 4th session of the Board on 19
November 2008. Pursuant to this resolution, the Company has through 6 of its
branch companies entered into the Acquisition Agreements to acquire the assets
under the Risk Operation Service Business from 6 subordinate enterprises of
CNPC. Upon completion of the Acquisition, the Company will pay consideration in
the sum of RMB5,306.31 million (approximately HK$6,023.35 million) to CNPC. The
parties will adjust the consideration by reference to the change in net assets
of assets under the Risk Operation Service Business for the period from 31
August 2008 to the Completion Date on a dollar-for-dollar basis.
- Abstention from voting by connected directors
A meeting of the Board was convened on 19 November 2008 by way of physical
meeting. Mr Jiang Jiemin, Chairman of the Company, Mr Zhou Jiping, Vice Chairman
of the Company, and Mr Wang Yilin, Mr Zeng Yukang, Mr Wang Fucheng, Mr Li
Xinhua, Mr Liao Yongyuan and Mr Wang Guoliang, directors of the Company, have
abstained from voting as connected
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directors on the ground of their work positions in CNPC. The remaining 6
directors of the Company eligible to vote in the meeting (including the
independent non-executive directors) have considered the resolution and resolved
in favour of the resolution unanimously.
- Reasons for the Acquisition and Benefit to the Company
The Company is principally engaged in the exploitation of oil and gas resources
in the PRC. The Board considers that the acquisition of the assets of the Risk
Operation Service Business is in line with the development strategies of the
Company as a whole.
Currently, the marginal oil reserve regions corresponding to the Risk Operation
Service Business belong to the Company. However, due to historical factors like
the level of development technology, CNPC and its subordinate enterprises have
provided risk operation service including development and production operations
to the Company in respect of these reserve regions. Following changes in oil
prices and evolution of exploitation technologies in recent years, conditions
have existed for the Company to expand its risk operation service business. As a
result of the Acquisition: (i) the Company is able to directly develop and
exploit the marginal oil reserve regions corresponding to the Risk Operation
Service Business by adopting the more advanced technologies; (ii) the Company
intends to apply new techniques, new technologies and its experience in oil and
gas production management on the assets acquired, which enables the Company to
achieve scientific, rational, continuous and efficient exploitation of its
reserve resources and the efficient deployment of the Company's oil and gas
resources as a whole; (iii) the Risk Operation Service Business possesses a
certain level of economic returns and risk tolerance; and (iv) as the operation
of the assets of the Risk Operation Service Business will be independently
conducted by 6 branch companies of the Company after completion of the
Acquisition, the Acquisition is conducive to reduction of the connected
transactions between the Company and CNPC.
1. SUMMARY OF THE CONNECTED TRANSACTION
(A) The Acquisition
6 branch companies of the Company and 6 subordinate enterprises of
CNPC have on 19 November 2008 entered into the Acquisition Agreements,
under which the Company will acquire the assets under the Risk
Operation Service Business from these 6 enterprises. Upon completion
of the Acquisition, the Company will pay consideration in the sum of
RMB5,306.31 million (approximately HK$6,023.35 million) to CNPC. The
parties will adjust the consideration by reference to the change in
net assets of the Risk Operation Service Business for the period from
the date of valuation to the Completion Date on a dollar-for-dollar
basis.
(B) Regulatory requirements under the HKEx Listing Rules and the SSE
Listing Rules
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As of the date of this announcement, CNPC is the controlling
shareholder of the Company. The 6 enterprises disposing of the assets
under the Risk Operation Service Business are all wholly-owned
subordinate enterprises of CNPC and hence associates of CNPC under the
HKEx Listing Rules. Pursuant to the HKEx Listing Rules and the SSE
Listing Rules, each of these enterprises is a connected person of the
Company. The Acquisition hence constitutes a connected transaction of
the Company.
Under the HKEx Listing Rules, as all of the applicable percentage
ratios for the Acquisition are more than 0.1% but less than 2.5% for
the Company, the Company is only subject to the reporting and
announcement requirements, and is exempt from the independent
shareholders' approval requirement. Under the SSE Listing Rules, as
the consideration for the Acquisition is below 5% of the latest
audited net assets of the Company, the Acquisition only needs to be
approved by the Board and does not need to be approved at a general
meeting of shareholders.
During the period from the beginning of 2008 to the date of this
announcement, connected transactions (except continuing connected
transactions) between the Company and CNPC and enterprises directly or
indirectly controlled by CNPC, which has been taken place and
disclosed, amounted to RMB7,698.9822 million, subject to possible
adjustments for change in net assets between the respective valuation
dates and completion dates (the exchange rates as of the respective
announcement dates have been applied in the conversion of the relevant
amounts). This amount is below 5% of the latest audited net assets of
the Company.
2. INFORMATION ON CONNECTED PARTIES
(A) CNPC
CNPC, the controlling shareholder of the Company, is a petroleum and
petrochemical conglomerate that was formed in July 1998 as a result of
the restructuring launched by the State Council of the predecessor of
CNPC, China National Petroleum Company (CHINESE CHARACTERS). CNPC is
also a state-authorised investment corporation and a state controlled
company. CNPC is an integrated energy corporation with businesses
covering oil and gas exploration and development, refining and
petrochemical, oil product marketing, oil and gas storage and
transportation, oil trading, engineering and technical services and
petroleum equipment manufacturing. The vendors with respect to the
Acquisition are all wholly-owned subsidiaries of CNPC.
(B) 6 subordinate enterprises of CNPC
Information of the 6 subordinate enterprises as of the date of this
announcement is set out as follows:
(1) Liaohe Petroleum Exploration Board
Date of establishment: 11 December 1984
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Nature of enterprise: Enterprise owned by the whole people
Address: Zhenxing Street, Xinglong Terrace, Panjin City
Registered capital: RMB5,600 million
Legal representative: Xie Wenyan
Principal activities: Exploration and exploitation of crude oil,
natural gas and oil and gas accompanying mineral reserves;
processing and sales of crude oil and natural gas, exploitation
of oil shale, development of coal bed gas, town gas and gas
supplies to motor vehicles.
(2) Jilin Petroleum Group Company Limited
Date of establishment: 11 January 2001
Nature of enterprise: Wholly state-owned
Address: 29 Jinjiang Main Street, Songyuan City
Registered capital: RMB3,139.68 million
Legal representative: Hou Qijun
Principal activities: Exploration and exploitation of oil and
gas, petroleum related tools, machinery processing, petrochemical
equipment processing, growing of crops, technical consultations
on oil and gas, construction of first-grade chemical oil
projects.
(3) Dagang Oilfields Group Company Limited
Date of establishment: 24 November 1995
Nature of enterprise: Wholly state-owned
Address: Court number 3, Dagang District, Tianjin City
Registered capital: RMB3,585.91 million
Legal representative: Li Jianqing
Principal activities: Exploration, exploitation, processing and
production of commodities in relation to natural crude oil and
natural gas; accompanying products of oil and gas and its
integrated use; technical consultations and services on oil and
natural gas; manufacturing of oil exploration equipment, tools
and accessories; construction projects.
(4) Northern China Petroleum Board
Nature of enterprise: Enterprise owned by the whole people
Address: Huizhan Avenue, Renqiu City
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Registered capital: RMB9,185.564 million
Legal representative: Su Jun
Principal activities: Organising exploration, exploitation,
construction for productions, processing and the integrated use
of oil, gas or minerals discovered during the exploration of oil
and gas.
(5) Sichuan Petroleum Board
Nature of enterprise: Enterprise owned by the whole people
Address: 3, Section 1, Fuqing Road, Chengdu City
Registered capital: 2,400.64 million
Legal representative: Li Luguang
Principal activities: Exploration and exploitation of oil and
gas, construction for productions, exploitation of minerals
discovered during the exploration of oil and gas, processing of
oil and gas, manufacturing and repairing oil-related machines and
meters, oil and gas chemical production and production of other
products; importing and exporting and economic and technological
cooperation with foreign entities.
(6) Changqing Petroleum Exploration Board
Nature of enterprise: Enterprise owned by the whole people
Address: Changqing Xinglong Community, Weiyang District, Xi'an
City
Registered capital: RMB2,622.64 million
Legal representative: Yan Xinquan
Principal activities: Exploration and exploitation of oil and
natural gas, etc.
(C) The Company
The Company is a joint stock company incorporated on 5 November 1999
under the PRC company law as a result of the restructuring of CNPC.
The ADSs, H shares and A shares of the Company are listed on the New
York Stock Exchange, the Hong Kong Stock Exchange and Shanghai Stock
Exchange respectively.
The Company is the largest oil and gas producer and seller occupying a
leading position in the oil and gas industry in the PRC and one of the
largest companies in the PRC in terms of revenue and one of the
largest oil companies in the world. The Company and its subsidiaries
engage in a broad range of petroleum and natural gas related
activities including the exploration, development, production and
sales of crude oil and natural gas; the refining, transportation,
storage and marketing of crude oil and petroleum products; the
production and sales of basic
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petrochemical products, derivative chemical products and other
chemical products; and the transmission of natural gas, crude oil and
refined products, and the sales of natural gas.
3. INFORMATION ON THE ASSETS TO BE ACQUIRED
For the purpose of the Acquisition, the Company has retained Beijing
Tianyuanquan Certified Public Accountants Limited for an audit on the
assets under the Risk Operation Service Business in accordance with the
China Accounting Standards for Business Enterprises. As of 31 August 2008,
the audited net asset value of the assets under the Risk Operation Service
Business which the Company proposed to acquire amounts to RMB5,689.9113
million, and the audited net asset values of the 6 subordinate enterprises
are set out as follows:
(Unit: RMB million)
Vendor of the assets under the
Risk Operation Service Business Total assets Total liabilities Net Assets
------------------------------- ------------ ----------------- ----------
Liaohe Petroleum Exploration Board 1,681.2118 58.4497 1,622.7621
Jilin Petroleum Group Company Limited 879.3684 235.3953 643.9731
Dagang Oilfields Group Company Limited 252.0971 2.7968 249.3003
Northern China Petroleum Board 420.5292 194.5954 225.9338
Sichuan Petroleum Board 1,378.6436 110.7374 1,267.9062
Changqing Petroleum Exploration Board 1,964.1728 284.1370 1,680.0358
As of 31 August 2008, the net asset value of the respective assets under
the Risk Operation Service Business as assessed by China Enterprise
Appraisals Co., Ltd., Beijing by using the asset-based approach amounts to
RMB5,895.8991 million. Valuations of the 6 respective enterprises are set
out below:
(Unit: RMB million)
Vendor of the assets under the
Risk Operation Service Business Total assets Total liabilities Net Assets
------------------------------- ------------ ----------------- ----------
Liaohe Petroleum Exploration Board 1,662.7702 58.4497 1,604.3205
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Jilin Petroleum Group Company Limited 923.1699 235.3953 687.7746
Dagang Oilfields Group Company Limited 267.6498 2.7968 264.8530
Northern China Petroleum Board 481.4445 194.5954 286.8491
Sichuan Petroleum Board 1,307.8472 110.7374 1,197.1098
Changqing Petroleum Exploration Board 2,139.1291 284.1370 1,854.9921
Based on the pro forma accounts of the assets of the Risk Operation Service
Business prepared in accordance with the Generally Accepted Accounting
Principles of the PRC, the unaudited net profit before and after tax
attributable to the assets under the Risk Operation Service Business for
the financial year ended 31 December 2006 amounted to approximately
RMB272.24 million (approximately HK$309.03 million) and RMB271.13 million
(approximately HK$307.77 million); and the unaudited net profit before and
after tax attributable to the assets of the Risk Operation Service Business
for the financial year ended 31 December 2007 amounted to approximately
RMB360.37 million (approximately HK$409.07 million) and RMB360.47 million
(approximately HK$409.18 million). As the subordinate enterprises of CNPC
developed the relevant assets over a number of years in the past instead of
purchasing the same, there is no original purchase cost attributable to
these assets.
4. MAJOR TERMS OF THE CONNECTED TRANSACTION AND ACQUISITION AGREEMENTS
1. Date:
19 November 2008
2. Parties:
Vendors: 6 subordinate enterprises of CNPC (i.e. (1) Liaohe
Petroleum Exploration Board; (2) Jilin Petroleum Group
Company Limited; (3) Dagang Oilfields Group Company
Limited; (4) Northern China Petroleum Board; (5) Sichuan
Petroleum Board; and (6) Changqing Petroleum Exploration
Board)
Purchasers: 6 branch companies of the Company (i.e. (1) Liaohe
Oilfields Branch Company, PetroChina Company Limited;
(2) Jilin Oilfields Branch Company, PetroChina Company
Limited; (3) Dagang Oilfields Branch Company, PetroChina
Company Limited; (4) Northern China Oilfields Branch
Company, PetroChina Company Limited; (5) South-western
Oil and Gas Fields Branch Company, PetroChina Company
Limited; and (6)
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Changqing Oilfields Branch Company, PetroChina Company
Limited)
3. The Acquisition
Subject to satisfaction of the conditions precedent under the
Acquisition Agreements, the Company will acquire the assets of the
Risk Operation Service Business. Assets under the Risk Operation
Service Business includes assets, liabilities and rights of 6
subordinate enterprises of CNPC and includes, in particular: (1)
buildings and other structures, cash and bank deposits and accounts,
stock, accounts receivables, machines and equipment and their
peripheral equipment and facilities etc. held by the relevant
enterprise operating the Risk Operation Service Business; and (2)
rights and obligations under related contracts and agreements.
4. Consideration
The Acquisition was negotiated and entered into on an arm's length
basis and on normal commercial terms. The consideration of the
Acquisition was determined by reference to the value of the assets of
the Risk Operation Service Business as confirmed in the valuation
report prepared by China Enterprise Appraisals Co., Ltd., Beijing
using 31 August 2008 as the date of valuation, taking also in
consideration the oil prices, the profitability of the subject assets
and the quality of the subject assets. Parties to the Acquisition
Agreements have agreed on the consideration of RMB5,306.31 million
after amicable negotiations. The Company will pay in cash
consideration in the sum of RMB5,306.31 million (approximately
HK$6,023.35 million) to the 6 subordinate enterprises of CNPC. The
parties will adjust the consideration by reference to the change in
net assets of the Risk Operation Service Business for the period from
31 August 2008 to the Completion Date on a dollar-for-dollar basis.
The Company will satisfy the consideration with internal resources.
The adjusted consideration is expected to be paid by the Company to
the 6 subordinate enterprises of CNPC within 30 days after the
Completion Date.
5. Conditions Precedent to completion of the Acquisition Agreements
Completion of the Acquisition Agreements is subject to the
satisfaction of certain conditions precedent, including:
(a) the Company having completed due diligence on the assets under
the Risk Operation Service Business;
(b) the vendors having obtained all necessary consents of the
creditors and any other relevant third parties in connection with
the transfer of the assets under the Risk Operation Service
Business;
(c) there having been no material adverse change to the business
operation and technical performance of the Risk Operation Service
Business; and
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(d) the representations, warranties and undertakings given by the
vendors being true, accurate, complete and valid as at the date
of completion.
The parties shall use reasonable endeavours to procure that the
conditions precedent to be fulfilled on or before 30 November 2008. In
the event that any of the conditions precedent has not been fulfilled
on or before 30 November 2008 by reason of the vendors, the Company
shall be entitled to terminate the Acquisition Agreements.
6. Completion
Completion is expected to take place 30 November 2008 or the date on
which all conditions precedent of the Acquisition Agreements are
satisfied, whichever is later.
5. REASONS FOR THE ACQUISITION AND BENEFIT TO THE COMPANY
The Company is principally engaged in the exploitation of oil and gas
resources in the PRC. The Board considers that the acquisition of the
assets under the Risk Operation Service Business is in line with the
development strategies of the Company as a whole.
Currently, the marginal oil reserve regions corresponding to the Risk
Operation Service Business belong to the Company. However, due to
historical factors like the level of development technology, CNPC and its
subordinate enterprises have provided risk operation service including
development and production operations to the Company in respect of these
reserve regions. Following changes in oil prices and evolution of
exploitation technologies in recent years, conditions have existed for the
Company to expand its risk operation service business. As a result of the
Acquisition: (i) the Company is able to directly develop and exploit the
marginal oil reserve regions corresponding to the Risk Operation Service
Business by adopting the more advanced technologies; (ii) the Company
intends to apply new techniques, new technologies and its experience in oil
and gas production management on the assets acquired, which enables the
Company to achieve scientific, rational, continuous and efficient
exploitation of its reserve resources and the efficient deployment of the
Company's oil and gas resources as a whole; (iii) the Risk Operation
Service Business possesses a certain level of economic returns and risk
tolerance; and (iv) as the operation of the assets of the Risk Operation
Service Business will be independently conducted by 6 branch companies of
the Company after completion of the Acquisition, the Acquisition is
conducive to reduction of the connected transactions between the Company
and CNPC.
The directors of the Company (including the independent non-executive
directors) consider that the terms of the Acquisition are fair and
reasonable and in the interests of the shareholders of the Company as a
whole.
6. BOARD APPROVAL AND THE INDEPENDENT NON-EXECUTIVE DIRECTORS' OPINION
The 3rd meeting of the 4th session of the Board was held on 19 November
2008 by way of physical meeting. 11 directors attended the meeting out of
the total of 14. Mr Zhou Jiping, Mr Wang Yilin and Mr Zeng Yukang,
directors of the Company, were absent
9
from the meeting and have respectively appointed Mr Wang Fucheng and Mr Li
Xinhua in writing to attend the meeting and vote on their respective
behalves. Mr Jiang Jiemin, Chairman of the Company, Mr Zhou Jiping, Vice
Chairman of the Company, and Mr Wang Yilin, Mr Zeng Yukang, Mr Wang
Fucheng, Mr Li Xinhua, Mr Liao Yongyuan and Mr Wang Guoliang, directors of
the Company, have abstained from voting as connected directors on the
ground of their work positions in CNPC. The remaining 6 directors of the
Company eligible to vote in the meeting (including the independent
non-executive directors) have considered the resolution and resolved in
favour of the resolution unanimously. The number of directors who
participated in the voting constituted a quorum. The convening of and the
voting at the meeting were legal and valid.
The independent non-executive directors of the Company consider that the
above-mentioned connected transaction was entered into during the normal
and ordinary course of business of the Company, in compliance with all the
procedures prescribed in the relevant applicable laws and regulations and
the Articles of Association, and on normal commercial terms, and the
connected transaction is fair and reasonable and in the interests of the
Company and its shareholders as a whole.
7. DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents are available for inspection during
normal business hours at the Company's legal address:
(i) the resolution of the 3rd meeting of the 4th session of the Board;
(ii) the independent non-executive directors' opinion;
(iii) the Acquisition Agreements; and
(iv) relevant auditors' report and valuation report.
8. DEFINITION
In this announcement, unless the context otherwise requires, the following terms
shall have the following meanings:
"Acquisition" the acquisition of the interests and assets of the
Risk Operation Service Business from 6 subordinate
enterprises of CNPC by the Company pursuant to the
Acquisition Agreements
"Acquisition Agreements" six acquisition agreements each dated 19 November
2008 entered into between 6 branch companies of the
Company and 6 subordinate enterprises of CNPC in
respect of the Acquisition
"Articles of Association" the articles of association of the Company
"Board" the board of directors of the Company, including the
independent non-executive directors of the Company
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"CNPC" China National Petroleum Corporation (CHINESE
CHARACTERS), a State-owned enterprise incorporated
under the laws of the PRC and the controlling
shareholder of the Company, and includes its
subsidiaries (save and except the Company)
"Company" PetroChina Company Limited, a joint stock limited
company incorporated in the PRC under the Company
Law of the PRC, and listed on the Shanghai Stock
Exchange and main board of The Stock Exchange of
Hong Kong Limited with American depository shares
listed on the New York Stock Exchange
"Completion Date" 30 November 2008 or the date on which all conditions
precedents of the Acquisition Agreements are
satisfied, whichever is later
"HKEx Listing Rules" the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited
"Hong Kong" the Hong Kong Special Administrative Region of the
PRC
"PRC" the People's Republic of China, which for the
purpose of this announcement only, does not include
the Hong Kong and Macau Special Administrative
Regions and Taiwan
"Risk Operation Service includes assets, liabilities and interests related
Business" to the risk Operation service business of Liaohe
Petroleum Exploration Board, Jilin Petroleum Group
Company Limited, Dagang Oilfields Group Company
Limited, Northern China Petroleum Board, Sichuan
Petroleum Board and Changqing Petroleum Exploration
Board and includes, in particular: (1) buildings and
other structures, cash and bank deposits and
accounts, stock, accounts receivables, machines and
equipment and their peripheral equipment and
facilities etc. held by the relevant enterprise
operating the Risk Operation Service Business; and
(2) rights and obligations under related contracts
and agreements.
"SSE Listing Rules" the listing rules of the Shanghai Stock Exchange
"HK$" Hong Kong dollars, the lawful currency of Hong Kong
Special Administrative Region, PRC
"RMB" Renminbi, the lawful currency of the PRC
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In this announcement, RMB has been translated into HK$ at the rate close to the
date of the Acquisition Agreements of HK$1= RMB0.880956 for reference purpose
only.
By order of the Board
PETROCHINA COMPANY LIMITED
LI HUAIQI
Secretary to the Board
19 November 2008
Beijing, the PRC
As at the date of this announcement, the Board of Directors comprises Mr Jiang
Jiemin as the Chairman; Mr Zhou Jiping (Vice Chairman) and Mr Liao Yongyuan as
executive Directors; Mr Wang Yilin, Mr Zeng Yukang, Mr Wang Fucheng, Mr Li
Xinhua, Mr Wang Guoliang and Mr Jiang Fan as non-executive Directors; and Mr
Chee-Chen Tung, Mr Liu Hongru, Mr Franco Bernabe, Mr Li Yongwu and Mr Cui Junhui
as independent non-executive Directors.
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