United States securities and exchange commission logo
September 30, 2021
Chai Shouping
Chief Financial Officer
PetroChina Company Limited
9 Dongzhimen North Street
Dongcheng District, Beijing 100007
The People s Republic of China
Re: PetroChina Company
Limited
Form 20-F for the
Fiscal Year Ended December 31, 2020
Filed April 29,
2021
File No. 001-15006
Dear Mr. Shouping:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 20-F for Fiscal Year Ended December 31, 2020
Risk Factors
Risks Related to Government Regulation, page 11
1. Your operations in
China currently contribute the large majority of your revenue. Expand
the disclosure under
this risk factor to also provide specific and prominent disclosure
about the legal and
operational risks associated with operating in China. Your disclosure
should make clear
whether these risks could result in a material change in your operations
and/or the value of
your ADSs or could significantly limit or completely hinder your
ability to offer or
continue to offer securities to investors and cause the value of such
securities to
significantly decline or be worthless.
2. We note your disclosure
that your operations, like those of other People s Republic of
China oil and gas
companies, are subject to extensive regulations and control by the
Chai Shouping
FirstName
PetroChinaLastNameChai Shouping
Company Limited
Comapany 30,
September NamePetroChina
2021 Company Limited
September
Page 2 30, 2021 Page 2
FirstName LastName
People s Republic of China government. Revise the disclosure under
this risk factor to
also provide specific and prominent disclosure about the risks that
operating in China
poses to investors. In particular, describe the regulatory, liquidity,
and enforcement risks.
For example, specifically discuss risks arising from the legal system
in China, including
risks and uncertainties regarding the enforcement of laws and that
rules and regulations in
China can change quickly with little advance notice; and the risk that
the Chinese
government may intervene or influence your operations at any time, or
may exert more
control over foreign investment in China-based issuers, which could
result in a material
change in your operations and/or the value of your ADSs.
3. You disclose that because your operations are subject to extensive
regulations and control
by the People s Republic of China, you may face significant
constraints on your ability to
implement your business strategies, to develop or expand your business
operations or to
maximize your profitability. Given the Chinese government s
significant oversight and
discretion over the conduct of your business, please revise to provide
specific and
prominent disclosure highlighting the risk that the Chinese government
may intervene or
influence your operations at any time, which could result in a
material change in your
operations and/or the value of your ADSs.
Risks Related to Controlling Shareholder, page 13
4. As of December 31, 2020, China National Petroleum Corporation was your
controlling
shareholder and beneficially owned approximately 80.41% of your share
capital. Please
revise to provide this information as more prominent disclosure in
your filing and to
provide specific disclosure that identifies who controls China
National Petroleum
Corporation.
Risks Related to Climate Change, page 15
5. Disclose the specific material effects of transition risks related to
climate change that may
affect your business, financial condition, and results of operations,
such as policy and
regulatory changes that could impose operational and compliance
burdens, market trends
that may alter business opportunities, credit risks, or technological
changes.
6. Disclose any material litigation risks related to climate change and
the potential impact to
the company.
Item 4. Information on the Company
Exploration and Production, page 22
7. You disclose certain information for areas located outside China as a
single line item
described as Overseas on pages 25 and 29, and/or combined with
certain other
geographic areas located in China as a single line item described as
Other Regions and
Other on pages 26 through 27 and page 29. Items 1202 and 1204 of
Regulation S-K
require disclosure by geographic area. Provide us with a list of the
individual continents
and the individual countries located in each continent for the
geographic areas located
Chai Shouping
FirstName
PetroChinaLastNameChai Shouping
Company Limited
Comapany 30,
September NamePetroChina
2021 Company Limited
September
Page 3 30, 2021 Page 3
FirstName LastName
outside China and tell us your proposed disclosure revisions to
address the requirements in
Items 1202(a)(1) and 1204(a).
Please similarly revise your disclosure of the Supplementary
Information on Oil and Gas
Exploration and Production Activities (Unaudited) on pages F-71
through F-79 to present
the information required by FASB ASC 932-235-50-3 through 50-35A by
separate
geographic area.
Refer to the disclosure requirements in Item 1201(d) of Regulation S-K
and FASB ASC
932-235-50-6 through 50-11B for further clarification or guidance
regarding disclosure by
geographic area.
8. You disclose the number of exploration and development wells drilled
under the column
Others on page 27; the number of wells in the process of being
drilled and with multiple
completions on page 28; the number of productive wells and amounts of
developed and
undeveloped acreage under the line item Other Regions on page
28; the crude oil and
natural gas prices in the individual line items Average Sales Price
and Average
Realized Price on page 29; and the crude oil and natural gas
average realized prices and
average lifting costs under the line item Overall on page 30.
Tell us if these disclosures
include figures relating to wells and acreage for geographic areas
located outside China.
If your disclosures include information for geographic areas located
outside China, revise
your disclosures to provide this information separately by geographic
area to comply with
the requirements in Items 1205(a)(1) and (a)(2); Item 1206(a); Items
1208(a) and (b); and
Items 1204(b)(1) and (b)(2) of Regulation S-K. Refer to our comment
one and the
disclosure requirements in Item 1201(d) of Regulation S-K for further
clarification or
guidance regarding disclosure by geographic area.
9. Expand the disclosure under the section entitled "Reserves" on page 22
to provide a
general discussion of the technologies used to establish the
appropriate level of certainty
for reserves estimates from material properties included in the total
reserves disclosed.
Refer to the disclosure requirements in Item 1202(a)(6) of Regulation
S-K.
10. Expand your acreage disclosure to include material concentrations of
expiring gross and
net undeveloped acreage by geographical area. Refer to the disclosure
requirements in
Items 1201(d) and 1208(b) of Regulation S-K.
Item 5. Operating and Financial Review and Prospects, page 50
11. We note statements in your CSR report indicating that your board of
directors attaches
great importance to the management of climate change-related risks and
opportunities and
incorporates them into the company s development plan. Your CSR
report also indicates
that the philosophy of sustainability is deeply integrated in the
entire process of your
business operation and notes your commitment to contribute to global
carbon reduction.
We also note that you provided more expansive disclosure in your CSR
report than you
provided in your SEC filings. Please advise us what consideration you
gave to providing
Chai Shouping
FirstName
PetroChinaLastNameChai Shouping
Company Limited
Comapany 30,
September NamePetroChina
2021 Company Limited
September
Page 4 30, 2021 Page 4
FirstName LastName
the same type of climate-related disclosure in your SEC filings as you
provided in your
CSR report.
12. To the extent material, discuss the indirect consequences of
climate-related regulation or
business trends, such as the following:
decreased demand for goods or services that produce significant
greenhouse gas
emissions or are related to carbon-based energy sources;
increased demand for goods that result in lower emissions than
competing products;
increased competition to develop innovative new products that
result in lower
emissions;
increased demand for generation and transmission of energy from
alternative energy
sources; and
any anticipated reputational risks resulting from operations or
products that produce
material greenhouse gas emissions.
13. Quantify any material increased compliance costs related to climate
change.
14. If applicable and material, provide disclosure about any purchase or
sale of carbon credits
or offsets and any material effects on your business, financial
condition, and results of
operations.
15. If material, discuss the significant physical effects of climate
change on your operations
and results. This disclosure may include the following:
severity of weather, such as floods, hurricanes, sea levels,
extreme fires, and water
availability and quality;
quantification of any material weather-related damages to your
property or
operations;
potential for indirect weather-related impacts that have affected
or may affect your
major customers or suppliers; and
any weather-related impacts on the cost or availability of
insurance.
Exhibit Number 15.4 Reserves Report for the Year Ended on December 31, 2020
Prepared by
GLJ Petroleum Consultants, page 121
16. The reserve report filed as Exhibit 15.4 does not appear to address
all of the requirements
pursuant to Items 1202(a)(7) and (a)(8) of Regulation S-K. Please
obtain and file a revised
reserve report to address the following points.
The report should include the qualifications of the technical
person(s) within the
engineering firm primarily responsible for overseeing the
preparation of the estimates
(Item 1202(a)(7)).
The report should state the purpose for which the report was
prepared, e.g. for
inclusion as an exhibit in a filing made with the United States
Securities and
Exchange Commission (Item 1202(a)(8(i)).
The report should include the date on which the report was
completed (Item
1202(a)(8)(ii)).
The report should state the proportion of the Company s total
proved reserves
Chai Shouping
FirstName
PetroChinaLastNameChai Shouping
Company Limited
Comapany 30,
September NamePetroChina
2021 Company Limited
September
Page 5 30, 2021 Page 5
FirstName LastName
covered by the report (Item 1202(a)(8)(iii)).
The report should include a statement that the assumptions,
data, methods, and
procedures are appropriate for the purpose served by the report
(Item 1202(a)(8)(iv)).
The report should specify the average realized prices after
adjustments for location
and quality differentials, by product type including natural gas
liquids, if any, for the
reserves included in the report as part of the discussion of the
economic assumptions
(Item 1202(a)(8)(v)).
The report should include a discussion of the possible effects
of regulation on the
ability of the registrant to recover the estimated reserves (Item
1202(a)(8)(vi).
The report should include a statement that the third party used
all methods and
procedures as it considered necessary under the circumstances to
prepare the report
(Item 1202(a)(8)(viii)).
17. The reserve report refers to the results of other reports dated
January 2, 2021 and February
8, 2021, which are not included with the exhibit. Please obtain and
file a revised report to
include the referenced reports as supplemental information, or remove
these references if
you do not intend to include this supplemental information with the
filed report.
18. The reserve report disclosure, under the section entitled
Independent Petroleum
Consultant s Consent , includes a statement indicating the revenue
projections presented
in the report are based in part on forecasts of market prices,
currency exchange rates,
inflation, and market demand. Rule 4-10(a)(22)(v) requires the
estimates of proved
reserves be determined using existing economic conditions, excluding
escalations based
upon future conditions. If the estimates, including estimates of the
quantities and
associated values presented in Exhibit 15.4, do not fulfill the
requirements under Rule 4-
10(a)(22)(v) of Regulation S-X, please revise the report as necessary.
If the estimates were
prepared using existing economic conditions, obtain and file a revised
report to remove
language to the contrary.
Exhibit Number 15.5 Reserves Report for the Year Ended on December 31, 2020
Prepared by
McDaniel & Associates Consultants, Ltd., page 121
19. The reserve report filed as Exhibit 15.5 does not appear to address
all of the requirements
pursuant to Item 1202(a)(8) of Regulation S-K. Please obtain and file
a revised reserve
report to address the following points.
The report should state the proportion of the Company s total
proved reserves
covered by the report (Item 1202(a)(8)(iii)).
The report should include a statement that the assumptions, data,
methods, and
procedures are appropriate for the purpose served by the report
(Item 1202(a)(8)(iv)).
The report should specify the initial benchmark and the average
realized prices after
adjustments for location and quality differentials, by product
type including natural
gas liquids, if any, for the reserves included in the report as
part of the discussion of
the economic assumptions (Item 1202(a)(8)(v)).
The report should include a discussion of the possible effects of
regulation on the
ability of the registrant to recover the estimated reserves (Item
1202(a)(8)(vi)).
Chai Shouping
FirstName
PetroChinaLastNameChai Shouping
Company Limited
Comapany 30,
September NamePetroChina
2021 Company Limited
September
Page 6 30, 2021 Page 6
FirstName LastName
The report should include a discussion regarding the inherent
uncertainties of
reserves estimates (Item 1202(a)(8)(vii)).
20. The reserve report presents the results of a net present value
sensitivity analysis not
disclosed in the filing on Form 20-F. Please revise your filing to
include this information,
or obtain and file a revised reserve report that removes this analysis
if you do not intend to
include this supplemental information in your filing.
Item 19. Exhibits
Exhibit Number 15.3 Reserves Report for the Year Ended on December 31, 2020
Prepared by
Ryder Scott, page 119
21. The reserve report filed as Exhibit 15.3 does not appear to address
all of the requirements
pursuant to Items 1202(a)(7) and (a)(8) of Regulation S-K. Please
obtain and file a revised
reserve report to address the following points.
The report should include the qualifications of the technical
person(s) within the
engineering firm primarily responsible for overseeing the
preparation of the estimates
(Item 1202(a)(7)).
The report should state the purpose for which the report was
prepared, e.g. for
inclusion as an exhibit in a filing made with the United States
Securities and
Exchange Commission (Item 1202(a)(8)(i)).
The report should include the date on which the report was
completed (Item
1202(a)(8)(ii)).
The report should state the proportion of the Company s total
proved reserves
covered by the report (Item 1202(a)(8)(iii)).
The report should include a statement that the assumptions, data,
methods, and
procedures are appropriate for the purpose served by the report
(Item 1202(a)(8)(iv)).
The report should specify the initial benchmark and the average
realized prices after
adjustments for location and quality differentials, by product
type including natural
gas liquids, if any, for the reserves included in the report as
part of the discussion of
the economic assumptions (Item 1202(a)(8)(v)).
The report should include a discussion of the types and basis for
the operating
expenses and capital costs, including abandonment costs, included
in the estimates as
part of the discussion of the economic assumptions (Item
1202(a)(8)(v)).
The report should include a discussion of the possible effects of
regulation on the
ability of the registrant to recover the estimated reserves (Item
1202(a)(8)(vi)).
The report should include a discussion regarding the inherent
uncertainties of
reserves estimates (Item 1202(a)(8)(vii)).
The report should include a statement that the third party used
all methods and
procedures as it considered necessary under the circumstances to
prepare the report
(Item 1202(a)(8)(viii)).
22. The reserve report disclosure, under the section entitled
Confidential , includes
statements indicating that this document is confidential and has been
prepared for the
exclusive use of CNODCI/PetroChina, that the report may not be
distributed or made
Chai Shouping
PetroChina Company Limited
September 30, 2021
Page 7
available to any other company or person without prior knowledge and
written consent of
Ryder Scott, and that no person or company other than for whom it is
intended may
directly or indirectly rely upon its contents. Since the report is
included in, and required as
part of, a filing made with the United States Securities and Exchange
Commission
pursuant to Item 1202(a)(8) of Regulation S-K, please obtain and file
a revised report to
remove language that limits the distribution of the report to an
exclusive audience.
23. The reserve report refers to the results of other reports dated
January 6, 2021, January 8,
2021, January 29, 2021, and February 5, 2021, which are not included
with the exhibit.
Please obtain and file a revised report to include the referenced
reports as supplemental
information, or remove these references if you do not intend to
include this supplemental
information with the filed report.
Supplementary Information on Oil and Gas Exploration and Production Activities
(Unaudited)
Proved Oil and Gas Reserve Estimates, page F-71
24. The proved reserves reconciliation table presented does not include
the separate volumes
of proved developed and proved undeveloped reserves at the beginning
of the initial year,
e.g. as of December 31, 2017. Revise your disclosure to include these
separate volumes.
Refer to the disclosure requirements in FASB ASC 932-235-50-4.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Diane Fritz, Staff Accountant, at (202) 551-3701 or
Kimberly Calder,
Assistant Chief Accountant, at (202) 551-3701 if you have questions regarding
comments on the
financial statements and related matters. Please contact Sandra Wall, Petroleum
Engineer, at
(202) 551-4727 or John Hodgin, Petroleum Engineer, at (202) 551-3699 if you
have any
questions regarding the engineering comments.
FirstName LastNameChai Shouping Sincerely,
Comapany NamePetroChina Company Limited
Division of
Corporation Finance
September 30, 2021 Page 7 Office of
Energy & Transportation
FirstName LastName