PETROCHINA COMPANY LIMITED 2019 ANNUAL REPORT PETROCHINA COMPANY LIMITED ANNUAL REPORT CONTENTS 002 IMPORTANT NOTICE 003 CORPORATE PROFILE 006 SUMMARY OF FINANCIAL DATA AND FINANCIAL INDICATORS 009 CHANGES IN SHAREHOLDINGS AND INFORMATION ON SHAREHOLDERS 015 CHAIRMAN’S REPORT 018 BUSINESS REVIEW 024 DISCUSSION AND ANALYSIS OF OPERATIONS 037 SIGNIFICANT EVENTS 046 CONNECTED TRANSACTIONS 054 CORPORATE GOVERNANCE 067 SHAREHOLDERS’ RIGHTS AND SHAREHOLDERS’ MEETINGS 069 DIRECTORS’ REPORT 077 REPORT OF THE SUPERVISORY COMMITTEE 081 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES 096 RELEVANT INFORMATION ON CORPORATE BONDS 103 INFORMATION ON CRUDE OIL AND NATURAL GAS RESERVES FINANCIAL STATEMENTS 106 PREPARED IN ACCORDANCE WITH CHINA ACCOUNTING STANDARDS 202 PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS 280 CORPORATE INFORMATION 284 DOCUMENTS AVAILABLE FOR INSPECTION 285 CONFIRMATION FROM THE DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT IMPORTANT NOTICE IMPORTANT NOTICE The Board of Directors (the “Board” or “Board of Directors”) of PetroChina Company Limited (the “Company”), the Supervisory Committee and the Directors, Supervisors and senior management of the Company warrant the truthfulness, accuracy and completeness of the information contained in this annual report and that there are no material omissions from, or misrepresentation or misleading statements contained in this annual report, and jointly and severally accept full responsibility thereof. The 2019 Annual Report has been approved at the third meeting of the Board of Directors in 2020. The independent non-executive Directors Mr. Lin Boqiang, Ms. Elsie Leung Oi-sie, Mr. Tokuchi Tatsuhito and Mr. Simon Henry were absent from the third meeting of the Board in 2020 due to the impact of Coronavirus Disease 2019 but had separately authorised Mr. Zhang Biyi, an independent non-executive Director in writing to attend the meeting by proxy and to exercise their voting rights on their behalf. Mr. Dai Houliang, Chairman of the Company, Mr. Duan Liangwei, Director and President of the Company, and Mr. Chai Shouping, Chief Financial Officer of the Company, warrant the truthfulness, accuracy and completeness of the financial statements in this annual report. No substantial shareholder of the Company has utilised the funds of the Company for non-operating purposes. The financial statements of the Company and its subsidiaries (the “Group”) have been prepared in accordance with China Accounting Standards (“CAS”) and International Financial Reporting Standards (“IFRS”), respectively. The financial statements of the Group for 2019, which have been prepared in accordance with CAS and IFRS, have been audited by KPMG Huazhen LLP and KPMG, respectively. Both firms have issued unqualified opinions on the financial statements. In overall view of the operating results , financial position, cash flow, etc. of the Company, to procure better return for the shareholders, the third meeting of the Board in 2020 recommends a final cash dividend of RMB0.06601 yuan (inclusive of applicable tax) per share for 2019 to all shareholders, based on the total share capital of the Company as at December 31, 2019, namely 183,020,977,818 shares. The cash dividend consists of a dividend of RMB0.04243 yuan per share (based on 45% of the net profit attributable to owners of the Company for the second half of 2019 under IFRS) together with an additional final special dividend of RMB0.02358 yuan per share. The proposed final dividend is subject to shareholders’ review and approval at the forthcoming 2019 annual general meeting to be held on June 11, 2020. This annual report contains certain forward-looking statements with respect to the financial position, operational results and business of the Group. These forward-looking statements are, by their names, subject to significant risk and uncertainties because they relate to events and depend on circumstances that may occur in the future and are beyond our control. The forward-looking statements reflect the Group’s current views with respect of future events and are not a guarantee of future performance. Actual results may differ from information contained in the forward-looking statements. 002 PETROCHINA COMPANY LIMITED CORPORATE PROFILE CORPORATE PROFILE The Company was established as a joint stock company with limited liability under the Company Law of the People’s Republic of China (the “PRC” or “China”) (the “Company Law”) on November 5, 1999 as part of the restructuring of China National Petroleum Corporation (“CNPC”). On December 19, 2017, 中國石油天然氣 集團公司, the Chinese name of CNPC was changed into 中國石油天然氣集團有限公司 (“CNPC” before and after the change of name). The Group 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 Group principally engages in, among others, the exploration, development, production and sales of crude oil and natural gas; the refining of crude oil and petroleum products; the production and sales of basic and derivative chemical products and other chemical products; the marketing and trading of refined products; and the transmission of natural gas, crude oil and refined products, and the sales of natural gas. The American Depositary Shares (the “ADSs”), H shares and A shares of the Company were listed on the New York Stock Exchange, the Stock Exchange of Hong Kong limited (“HKSE” or “Hong Kong Stock Exchange”) and Shanghai Stock Exchange on April 6, 2000, April 7, 2000 and November 5, 2007, respectively. Registered Chinese Name of the Company: 中國石油天然氣股份有限公司 English Name of the Company: PetroChina Company Limited Legal Representative of the Company: Dai Houliang Secretary to the Board: Wu Enlai Address: No. 9 Dongzhimen North Street Dongcheng District Beijing, PRC Telephone: 86(10) 5998 2622 Facsimile: 86(10) 6209 9557 Email Address: [email protected] Representative on Securities Matters: Liang Gang Address: No. 9 Dongzhimen North Street Dongcheng District Beijing, PRC Telephone: 86(10) 5998 6959 Facsimile: 86(10) 6209 9559 Email address: [email protected] 2019 ANNUAL REPORT 003 CORPORATE PROFILE Chief Representative of the Hong Kong Representative Office: Wei Fang Address: Suite 3705, Tower 2, Lippo Centre 89 Queensway, Hong Kong Telephone: (852) 2899 2010 Facsimile: (852) 2899 2390 Email Address: [email protected] Legal Address of the Company: 16 Andelu Dongcheng District Beijing, PRC Postal Code: 100011 Principal Place of Business: No. 9 Dongzhimen North Street Dongcheng District Beijing, PRC Postal Code: 100007 Internet Website: http://www.petrochina.com.cn Company’s Email Address: [email protected] Newspapers for Information Disclosure: A shares: China Securities Journal, Shanghai Securities News and Securities Times Internet website publishing this annual report designated by the China Securities Regulatory Commission: http://www.sse.com.cn Copies of this annual report are available at: No. 9 Dongzhimen North Street, Dongcheng District, Beijing, PRC Places of Listing: A shares: Shanghai Stock Exchange Stock Name: PetroChina Stock Code: 601857 H shares: Hong Kong Stock Exchange Stock Name: PETROCHINA Stock Code: 857 ADSs: The New York Stock Exchange Symbol: PTR 004 PETROCHINA COMPANY LIMITED CORPORATE PROFILE Other relevant information: Names and Addresses of Auditors of the Company: Domestic Auditors: Name: KPMG Huazhen LLP Address: 8th Floor, KPMG Tower, Oriental Plaza 1 East Chang An Avenue Dongcheng District Beijing, PRC Signing accountants: Yang Jie, CPA He Shu, CPA Overseas Auditors: Name: KPMG Public Interest Entity Auditor registered in accordance with the Financial Reporting Council Ordinance Address: 8th Floor, Prince’s Building, 10 Chater Road Central, Hong Kong 2019 ANNUAL REPORT 005 SUMMARY OF FINANCIAL DATA AND FINANCIAL INDICATORS SUMMARY OF FINANCIAL DATA AND FINANCIAL INDICATORS 1. Key Financial Data Prepared under IFRS Unit: RMB Million As at or for the year ended December 31 Items 2019 2018 2017 2016 2015 Revenue 2,516,810 2,374,934 2,032,298 1,627,588 1,736,663 Profit from operations 121,762 122,942 70,836 62,662 78,930 Profit before income tax expense 103,214 116,770 55,691 46,574 56,815 Income tax expense (36,199) (42,790) (16,296) (15,919) (15,726) Profit for the year 67,015 73,980 39,395 30,655 41,089 Attributable to: Owners of the Company 45,682 53,036 23,537 8,222 35,234 Non-controlling interest 21,333 20,944 15,858 22,433 5,855 Basic and diluted earnings per share attributable to owners of the Company (RMB) (1) 0.25 0.29 0.13 0.04 0.19 Total current assets 466,913 438,241 430,294 385,199 353,560 Total non-current assets 2,265,997 2,002,636 1,983,205 2,019,003 2,048,512 Total assets 2,732,910 2,440,877 2,413,499 2,404,202 2,402,072 Total current liabilities 661,419 596,430 588,551 507,530 479,653 Total non-current liabilities 627,186 435,556 446,960 529,870 585,403 Total liabilities 1,288,605 1,031,986 1,035,511 1,037,400 1,065,056 Equity Attributable to: Owners of the Company 1,230,156 1,213,783 1,192,572 1,187,337 1,177,721 Non-controlling interest 214,149 195,108 185,416 179,465 159,295 Total equity 1,444,305 1,408,891 1,377,988 1,366,802 1,337,016 Other financial data Capital expenditures 296,766 256,106 219,346 172,961 203,302 Net cash flows from operating activities 359,610 353,256 368,729 268,897 261,855 Net cash flows used for investing activities (332,948) (267,812) (243,790) (176,310) (217,112) Net cash flows used for financing activities (27,276) (125,703) (96,746) (70,454) (44,673) Return on net assets (%) 3.7 4.4 2.0 0.7 3.0 Note: (1) As at December 31, 2015, 2016, 2017, 2018 and 2019 respectively, basic and diluted earnings per share were calculated by dividing the net profit with the number of issued shares of 183,021 million for each of these financial years.