As oil flies past $90 a barrel and energy producers are the biggest losers on S&P 500, it seems that its a pretty bad time for PetroChina to claim the title as the second largest company in the world (and second largest oil producer for that matter). In fact, many Chinese companies are slowly climbing up this market cap scale. Of the 15 lagrest companies in the world, 5 are Chinese companies (PetroChina, China Mobile, ICBC, Sinopec and China Life), making up the majority of emerging market companies on the list (Gazprom, the only other emerging market business, is Russian).
There's more trouble for ahead for East Asian oil businesses though. Japan continue to bicker with China over the ownership of gas fields located between Shanghai and Okinawa. China has already been drilling in the offshore fields, and Japan demands more proactive proposals on China's part. Both sides will meet later this year to hope to endorse a joint drilling venture.
(Note: I didn't mention this dispute in the previous post on CNOOC because the Iranian oil fields dispute pose a significant larger threat to its earnings than China-Japan relations, but yes, disputes here will lead to greater uncertainty in CNOOC's future).
As 2 of the 5 largest Chinese companies are oil companies, and as China become more responsible for the world's growth as time passes by, the entire global community will weight ups and downs in accordance to future oil prices. Right now, that future looks bearish. Some help, OPEC?
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