Big Oil is seeing a Big Shift these days. A Chinese upstart has taken over the rank of No. 1 leaving an American company in its wake. Exxon Mobil was displaced as the world’s largest oil producer, that is publicly traded. Now, for the first time ever, that distinction has been handed over to PetroChina a 13-year old company that is 86% owned by the Chinese government.
On Thursday, PetroChina announced it had reached the 2.4 million barrels per day threshold last year. That surpassed oil giant Exxon by nearly 100,000 per day. Over the past ten years the company has rapidly grown by squeezing all it can from the aging fields in China and by outspending its Western competitors to acquire other petroleum reserves in Qatar, Iraq and Canada. It motivation is the need to have as much oil as possible because of the huge demand in China.
In 2011, PetroChina increased output by over 3%, while Exxon dropped by 5%. Exxon’s production of oil has also dropped behind that of Russian company Rosneft.
One reason, experts believe PetroChina has grown so quickly they are looking to sure up as much oil as possible, while Western companies look more to the bottom line and return for investors. Because the price of oil has increased by 19% this year, the companies are still earning huge profits by maintaining the same production levels.
The Chinese government on the other hand, owns PetroChina almost entirely and nearly every drop that is produced is used in the country.