Petrochina's IPO Approved

The Shanghai initial public offering of PetroChina was approved by the China Securities Regulatory Commission on Monday.

There are indications that PetroChina's market value could hit 2 trillion yuan, much more than the Industrial and Commercial Bank of China. The nation's largest oil producer will also be the biggest in the A-share market.

The oil giant will sell up to 4 billion yuan-denominated A-shares in the IPO to raise 37 billion yuan. This is according to the prospectus filed with the China Securities Regulatory Commission.

It will use the money to boost production at its Changqing, Daqing and Jidong oil fields. It also plans to upgrade its Dushanzi oil refinery and ethylene facilities.

In addition to PetroChina, China Construction Bank, China Shenhua, and China Oil Field Service have issued or will issue A-shares. Experts say the massive cash calls, all coming at one time, will absorb much of the liquidity in the capital markets.

PetroChina is one of the world's largest oil producers and sellers. Among the world's top 250 oil companies, it takes the top slot in the Asia Pacific area. The company went public in Hong Kong in April 2004. Boosted by the new move, its Hong Kong shares rose by 10 percent, the highest in more than four months, to a record 14.3 Hong Kong dollars at Monday's close.