##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
     Form 20-F
  (Mark One)o

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR
    12(g)
    OF THE SECURITIES EXCHANGE ACT OF 1934orþ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31,
    2009.oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934oro

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this
    shell company reportFor the transition period from
    
    to   Commission File Number
    1-15006
      
 (Exact name of Registrant as
    specified in its charter)
 PetroChina Company
    Limited
 (Translation of
    Registrants name into English)
      The Peoples Republic of
    China (Jurisdiction of
    incorporation or organization)
      9 Dongzhimen North Street
    Dongcheng District, Beijing 100007
    The Peoples Republic of China,
 (Address of principal executive
    offices)
      Li Hualin
    Telephone number: 8610 59986223
    Facsimile number: 8610 62099557
    Email address: suxinliang@petrochina.com.cn
    Address: 9 Dongzhimen North Street, Dongcheng District, Beijing
    100007 The Peoples Republic of China (Name, telephone,
    e-mail
    and/or facsimile number and address of registrants contact
    person)
      Securities registered or to be
    registered pursuant to Section 12(b) of the Act.
  Title of Each Class

Name of Each Exchange on Which RegisteredAmerican Depositary Shares, each representing 100 H Shares, par
    value RMB1.00 per share*

New York Stock Exchange, Inc.H Shares, par value RMB1.00 per share

New York Stock Exchange, Inc.**   Securities registered or to be
    registered pursuant to Section 12(g) of the Act.
  None
    (Title of Class)
  Securities for which there is a
    reporting obligation pursuant to Section 15(d) of the
    Act.
  None
    (Title of Class)
    A Shares, par value RMB1.00 per share***

161,922,077,818(1)H Shares, par value RMB1.00 per share

21,098,900,000****    (1):
    Includes 157,764,597,259 A Shares
    held by CNPC and 4,157,480,559 A Shares held by the public
    shareholders.   Yes
    þ      No
    o
  Yes
    o      No
    þ
    Yes
    þ      No
    o
  Regulation S-T
 Yes
    o      No
    o
 Rule 12b-2
 Large Accelerated Filer
    þ
    Accelerated Filer
    o
    Non-Accelerated Filer
    o   o
    U.S. GAAP
    þ
    International Financial Reporting Standards as issued by the
    International Accounting Standards Board
    o
    Other   Item 17
    o      
    Item 18
    o
 Rule 12b-2
 Yes
    o      No
    þ
    Yes
    o      No
    o
    *
    
    PetroChinas H Shares are
    listed and traded on The Stock Exchange of Hong Kong Limited.**
    
    Not for trading, but only in
    connection with the registration of American Depository Shares.***
    
    PetroChinas A Shares became
    listed on the Shanghai Stock Exchange on November 5, 2007.****
    
    Includes 1,970,667,300 H Shares
    represented by American Depositary Shares.




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Table of
    Contents
  PageCertain Terms and Conventions


4Forward-Looking Statements


8Part IItem 1





Identity of Directors, Senior Management and
    Advisors


9Item 2





Offer Statistics and Expected Timetable


9Item 3





Key Information


9Exchange Rates


9Selected Financial Data


10Risk Factors


12Item 4





Information on the Company


17Introduction


17Exploration and Production


24Refining and Chemicals


35Marketing


41Natural Gas and Pipeline


44Competition


47Environmental Matters


48Legal Proceedings


49Properties


50Intellectual Property


50Regulatory Matters


50Item 4A





Unresolved Staff Comments


57Item 5





Operating and Financial Review and Prospects


57General


57Operating Results


62Liquidity and Capital Resources


69Off-Balance Sheet Arrangements


74Long-Term Contractual Obligations and Other
    Commercial Commitments and Payment Obligations


74Research and Development


75Trend Information


75Other Information


76Item 6





Directors, Senior Management and Employees


77Directors, Senior Management and Supervisors


77Compensation


86Board Practices


86Employees


88Share Ownership


88Item 7





Major Shareholders and Related Party
    Transactions


89Major Shareholders


89Related Party Transactions


89Interests of Experts and Counsel


91 2




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Table of
    Contents
  PageItem 8





Financial Information


92Financial Statements


92Significant Changes


93Item 9





The Offer and Listing


94Nature of the Trading Market and Market Price
    Information


94Item 10





Additional Information


95Memorandum and Articles of Association


95Material Contracts


102Foreign Exchange Controls


102Taxation


102Documents on Display


108Item 11





Quantitative and Qualitative Disclosures About
    Market Risk


108Item 12





Description of Securities Other Than Equity
    Securities


112Part IIItem 13





Defaults, Dividends Arrearages and
    Delinquencies


112Item 14





Material Modifications to the Rights to Security
    Holders and Use of Proceeds


112Item 15





Controls and Procedures


113Item 16A





Audit Committee Financial Expert


113Item 16B





Code of Ethics


113Item 16C





Principal Accountant Fees and Services


114Item 16D





Exemptions from Listing Standards for Audit
    Committees


114Item 16E





Purchases of Equity Securities by the Issuer and
    Affiliated Purchasers


115Item 16F





Change In Registrants Certifying
    Accountant


115Item 16G





Corporate Governance


115Part IIIItem 17





Financial Statements


116Item 18





Financial Statements


117Item 19





Exhibits


117EX-4.1EX-4.4EX-4.24EX-4.25EX-4.26EX-4.27EX-4.28EX-4.29EX-8.1EX-12.1EX-12.2EX-13.1EX-13.2EX-15.1EX-15.2   3




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CERTAIN
    TERMS AND CONVENTIONS  Conventions
    Which Apply to this Annual Report
    
    CNPC or CNPC group are to our parent,
    China National Petroleum Corporation and its affiliates and
    subsidiaries, excluding PetroChina, its subsidiaries and its
    interests in long-term investments, and where the context refers
    to any time prior to the establishment of CNPC, those entities
    and businesses which were contributed to CNPC upon its
    establishment.
    PetroChina, we, our,
    our company, the company and
    us are to:  
    PetroChina Company Limited, a joint stock company incorporated
    in the Peoples Republic of China with limited liability
    and its subsidiaries and branch companies, or
    the CNPC groups domestic crude oil and natural gas
    exploration and production, refining and marketing, chemicals
    and natural gas businesses that were transferred to us in the
    restructuring of the CNPC group in 1999.  
    PRC or China is to the Peoples
    Republic of China, but does not apply to Hong Kong, Macau or
    Taiwan for purposes of this annual report.      Conversion
    Table
  1 barrel-of-oil
    equivalent

= 1 barrel of crude oil

= 6,000 cubic feet of natural gas1 cubic meter

= 35.315 cubic feet1 ton of crude oil

= 1 metric ton of crude oil

= 7.389 barrels of crude oil (assuming an API gravity of 34
    degrees)   Certain
    Oil and Gas Terms
    acreage
    
    The total area, expressed in acres, over which an entity has
    interests in exploration or production. Net acreage is the
    entitys interest, expressed in acres, in the relevant
    exploration or production area.API gravity
    
    An indication of the density of crude oil or other liquid
    hydrocarbons as measured by a system recommended by the American
    Petroleum Institute (API), measured in degrees. The lower the
    API gravity, the heavier the compound. 4




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condensate
    
    Light hydrocarbon substances produced with natural gas that
    condense into liquid at normal temperatures and pressures
    associated with surface production equipment.crude oil
    
    Crude oil, including condensate and natural gas liquids.developed reserves
    
    Under the new SEC reserve rules, developed reserves are reserves
    of any category that can be expected to be recovered:(i) through existing wells with existing equipment and
    operating methods or in which the cost of the required equipment
    is relatively minor compared to the cost of a new well; and(ii) through installed extraction equipment and
    infrastructure operational at the time of the reserves estimate
    if the extraction is by means not involving a well.development cost
    
    For a given period, costs incurred to obtain access to proved
    reserves and to provide facilities for extracting, treating,
    gathering and storing the oil and gas.finding cost
    
    For a given period, costs incurred in identifying areas that may
    warrant examination and in examining specific areas that are
    considered to have prospects of containing oil and gas reserves,
    including costs of drilling exploratory wells and
    exploratory-type test wells. Finding cost is also known as
    exploration cost.lifting cost
    
    For a given period, costs incurred to operate and maintain wells
    and related equipment and facilities, including applicable
    operating costs of support equipment and facilities and other
    costs of operating and maintaining those wells and related
    equipment and facilities. Lifting cost is also known as
    production cost.natural gas liquids
    
    Hydrocarbons that can be extracted in liquid form together with
    natural gas production. Ethane and pentanes are the predominant
    components, with other heavier hydrocarbons also present in
    limited quantities.offshore
    
    Areas under water with a depth of five meters or greater.onshore
    
    Areas of land and areas under water with a depth of less than
    five meters.primary distillation capacity
    
    At a given point in time, the maximum volume of crude oil a
    refinery is able to process in its basic distilling units.proved developed reserves
    
    Under the old SEC reserve rules, proved developed reserves are
    reserves that can be expected to be recovered through existing
    wells with existing equipment and operating methods. Additional
    oil and gas expected to be obtained through the application of
    fluid injection or other improved recovery techniques for
    supplementing the natural forces and mechanisms of primary
    recovery are included as proved developed reserves
    only after testing by a pilot project or after the operation of
    an installed program has confirmed through production response
    that increased recovery will be achieved.proved reserves
    
    Under the new SEC reserve rules, proved reserves are those
    quantities of oil and gas, which, by analysis of geoscience and
    engineering data, can be estimated with reasonable certainty to
    be economically 5




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producible  from a given date forward, from known
    reservoirs, and under existing economic conditions, operating
    methods, and government regulations  prior to the
    time at which contracts providing the right to operate expire,
    unless evidence indicates that renewal is reasonably certain,
    regardless of whether deterministic or probabilistic methods are
    used for the estimation. The project to extract the hydrocarbons
    must have commenced or the operator must be reasonably certain
    that it will commence the project within a reasonable time.(i) The area of the reservoir considered as proved includes:(A) The area identified by drilling and limited by fluid
    contacts, if any, and (B) Adjacent undrilled portions of
    the reservoir that can, with reasonable certainty, be judged to
    be continuous with it and to contain economically producible oil
    or gas on the basis of available geoscience and engineering data.(ii) In the absence of data on fluid contacts, proved
    quantities in a reservoir are limited by the lowest known
    hydrocarbons (LKH) as seen in a well penetration unless
    geoscience, engineering, or performance data and reliable
    technology establishes a lower contact with reasonable certainty.(iii) Where direct observation from well penetrations has
    defined a highest known oil (HKO) elevation and the potential
    exists for an associated gas cap, proved oil reserves may be
    assigned in the structurally higher portions of the reservoir
    only if geoscience, engineering, or performance data and
    reliable technology establish the higher contact with reasonable
    certainty.(iv) Reserves which can be produced economically through
    application of improved recovery techniques (including, but not
    limited to, fluid injection) are included in the proved
    classification when:(A) Successful testing by a pilot project in an area of the
    reservoir with properties no more favorable than in the
    reservoir as a whole, the operation of an installed program in
    the reservoir or an analogous reservoir, or other evidence using
    reliable technology establishes the reasonable certainty of the
    engineering analysis on which the project or program was based;
    and (B) The project has been approved for development by
    all necessary parties and entities, including governmental
    entities.(v) Existing economic conditions include prices and costs
    at which economic producibility from a reservoir is to be
    determined. The price shall be the average price during the
    12-month
    period prior to the ending date of the period covered by the
    report, determined as an unweighted arithmetic average of the
    first-day-of-the-month
    price for each month within such period, unless prices are
    defined by contractual arrangements, excluding escalations based
    upon future conditions.Under the old SEC reserve rules, proved reserves are estimated
    quantities of crude oil and natural gas which geological and
    engineering data demonstrate with reasonable certainty to be
    recoverable in future years from known reservoirs under existing
    economic and 6




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operating conditions, i.e., prices and costs as of the date the
    estimate is made. Prices include consideration of changes in
    existing prices provided only by contractual arrangements, but
    not of escalations based upon future conditions.proved undeveloped reserves
    
    Under the old SEC reserve rules, proved undeveloped reserves are
    reserves that are expected to be recovered from new wells on
    undrilled acreage, or from existing wells where a relatively
    major expenditure is required for recompletion. Reserves on
    undrilled acreage shall be limited to those drilling units
    offsetting productive units that are reasonably certain of
    production when drilled. Proved reserves for other undrilled
    units can be claimed only where it can be demonstrated with
    certainty that there is continuity of production from the
    existing productive formation. Under no circumstances should
    estimates for proved undeveloped reserves be attributable to any
    acreage for which an application of fluid injection or other
    improved recovery technique is contemplated, unless such
    techniques have been proved effective by actual tests in the
    area and in the same reservoir.reserve-to-production
    ratio
    
    For any given well, field or country, the ratio of proved
    reserves to annual production of crude oil or, with respect to
    natural gas, to wellhead production excluding flared gas.sales gas
    
    Marketable production of gas on an as sold basis,
    excluding flared gas, injected gas and gas consumed in
    operations.undeveloped reserves
    
    Under the new SEC reserve rules, undeveloped reserves are
    reserves of any category that are expected to be recovered from
    new wells on undrilled acreage, or from existing wells where a
    relatively major expenditure is required for recompletion.(i) Reserves on undrilled acreage shall be limited to those
    directly offsetting development spacing areas that are
    reasonably certain of production when drilled, unless evidence
    using reliable technology exists that establishes reasonable
    certainty of economic producibility at greater distances.(ii) Undrilled locations can be classified as having
    undeveloped reserves only if a development plan has been adopted
    indicating that they are scheduled to be drilled within five
    years, unless the specific circumstances, justify a longer time.(iii) Under no circumstances shall estimates for
    undeveloped reserves be attributable to any acreage for which an
    application of fluid injection or other improved recovery
    technique is contemplated, unless such techniques have been
    proved effective by actual projects in the same reservoir or an
    analogous reservoir, or by other evidence using reliable
    technology establishing reasonable certainty.water cut
    
    For a given oil region, the percentage that water constitutes of
    all fluids extracted from all wells in that region.    
    BOE is to
    barrels-of-oil
    equivalent,
    Mcf is to thousand cubic feet, and
    Bcf is to billion cubic feet. 7




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FORWARD-LOOKING
    STATEMENTS    
    the amounts and nature of future exploration, development and
    other capital expenditures;
    future prices and demand for crude oil, natural gas, refined
    products and chemical products;
    development projects;
    exploration prospects;
    reserves potential;
    production of oil and gas and refined and chemical products;
    development and drilling potential;
    expansion and other development trends of the oil and gas
    industry;
    the planned development of our natural gas operations;
    the planned expansion of our refined product marketing network;
    the planned expansion of our natural gas infrastructure;
    the anticipated benefit from the acquisition of certain overseas
    assets from CNPC, our parent company;
    the plan to continue to pursue attractive business opportunities
    outside China;
    our future overall business development and economic performance;
    our anticipated financial and operating information regarding,
    and the future development and economic performance of our
    business;
    our anticipated market risk exposure arising from future changes
    in interest rates, foreign exchange rates and commodity
    prices; and
    other prospects of our business and operations.      
    fluctuations in crude oil and natural gas prices;
    failure to achieve continued exploration success;
    failures or delays in achieving production from development
    projects;
    continued availability of capital and financing;
    acquisitions and other business opportunities that we may pursue;
    general economic, market and business conditions, including
    volatility in interest rates, changes in foreign exchange rates
    and volatility in commodity markets; 8




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
    liability for remedial actions under environmental regulations;
    impact of the PRCs entry into the World Trade Organization;
    the actions of competitors;
    wars and acts of terrorism or sabotage;
    changes in policies, laws or regulations of the PRC, including
    changes in applicable tax rates;
    the other changes in global economic and political conditions
    affecting the production, supply and demand and pricing of crude
    oil, refined products, petrochemical products and natural
    gas; and
    the other risk factors discussed in this annual report, and
    other factors beyond our control.   PART I ITEM 1  IDENTITY
    OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS   ITEM 2  OFFER
    STATISTICS AND EXPECTED TIMETABLE   ITEM 3  KEY
    INFORMATION Exchange
    Rates    Noon Buying
    Rate(1)High

Low(RMB per US$)December 2009


6.8299



6.8244January 2010


6.8295



6.8258February 2010


6.8330



6.8258March 2010


6.8270



6.8254April 2010


6.8275



6.8240May 2010


6.8310



6.8245June 2010 (ending as of June 18)


6.8323



6.8267     (1)
    
    The exchange rates reflect the noon buying rates as set forth in
    the H.10 statistical release of the Federal Reserve Board. 9




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Average
    Noon Buying
    Rates(1)
    Average NoonBuying Rate(RMB per US$)2005


8.18262006


7.95792007


7.58062008


6.91932009


6.8295     (1)
    
    For periods prior to January 1, 2009, the exchange rates
    reflect the noon buying rates as reported by the Federal Reserve
    Bank of New York. For periods after January 1, 2009, the
    exchange rates reflect the noon buying rates as set forth in the
    H.10 statistical release of the Federal Reserve Board. Selected
    Financial Data  Historical
    Financial Information
    Year Ended
    December 31,(1)2005


2006


2007


2008


2009RMB


RMB


RMBRMB


RMB(In millions, except for per share and per ADS data)Income Statement DataTurnover


554,063



691,448



837,542



1,072,604



1,019,275Operating expensesPurchases, services and other


(199,317
)


(270,112
)


(369,786
)


(562,851
)


(492,472
)Employee compensation costs


(29,770
)


(39,292
)


(50,940
)


(62,167
)


(65,977
)Exploration expenses, including exploratory dry holes


(15,569
)


(18,827
)


(20,956
)


(21,879
)


(19,398
)Depreciation, depletion and amortization


(51,803
)


(62,155
)


(67,423
)


(94,759
)


(92,259
)Selling, general and administrative expenses


(36,650
)


(43,400
)


(52,389
)


(59,617
)


(65,423
)Taxes other than income taxes


(23,997
)


(57,208
)


(73,806
)


(124,132
)


(135,465
)Other (expenses)/incomes, net


(3,083
)


(430
)


(1,225
)


12,372



(4,837
)Total operating expenses


(360,189
)


(491,424
)


(636,525
)


(913,033
)


(875,831
)Profit from operations


193,874



200,024



201,017



159,571



143,444Share of profit of affiliates and jointly controlled entities


2,002



1,686



6,445



4,290



1,184 10




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##### Table of Contents



Year Ended
    December 31,(1)2005


2006


2007


2008


2009RMB


RMB


RMBRMB


RMB(In millions, except for per share and per ADS data)Exchange gain (loss), net


85



272



(751
)


(1,081
)


(783
)Interest income


2,036



2,148



2,101



2,277



1,459Interest expense


(2,929
)


(3,328
)


(3,673
)


(3,044
)


(5,272
)Profit before income tax expense


195,068



200,802



205,139



162,013



140,032Income tax expense


(54,912
)


(50,615
)


(49,802
)


(35,211
)


(33,473
)Profit for the year


140,156



150,187



155,337



126,802



106,559Other comprehensive income/(loss)Foreign currency translation difference


(799
)


(358
)


(1,852
)


(2,676
)


(3,500
)Income/(loss) from the change in the fair value of the financial
    assets available for sale


83



(4
)


395



(340
)


191Income tax relating to components of other comprehensive
    income/(loss)


(28
)


2



(87
)


67



(38
)Other comprehensive loss (after tax net)


(744
)


(360
)


(1,544
)


(2,949
)


(3,347
)Total comprehensive income for the year


139,412



149,827



153,793



123,853



103,212Profit for the year attributable to:Owners of the company


134,381



143,498



146,796



114,453



103,387Non-controlling interest


5,775



6,689



8,541



12,349



3,172140,156



150,187



155,337



126,802



106,559Basic and diluted earnings per share for profitattributable to owners of the
    company(2)


0.76



0.80



0.82



0.63



0.56Basic and diluted earnings per ADS for profitattributable to owners of the
    company(3)


76.02



80.16



81.69



62.54



56.49   As of
    December 31,(1)2005

2006

2007

2008

2009RMB

RMB

RMB

RMB

RMB(In millions, except for per share and per ADS data)Statement of Financial Position DataInventories


62,782



76,081



88,507



90,670



114,781Cash and cash equivalents


83,034



50,869



68,817



33,150



86,925Total current assets


178,926



165,778



235,902



224,946



294,383Total non-current assets


606,483



714,509



833,709



971,289



1,155,905Total current liabilities


156,878



181,993



200,150



265,651



388,553Total non-current liabilities


81,862



75,675



86,742



82,744



154,034Equity attributable to owners of the company


517,921



590,414



738,246



790,910



847,223Non-controlling interest


28,748



32,205



44,473



56,930



60,478Total equity


546,669



622,619



782,719



847,840



907,701Share capital


179,021



179,021



183,021



183,021



183,021Other Financial DataDividend per share


0.34



0.36



0.36



0.28



0.25Dividend per ADS


33.80



35.75



36.25



28.14



25.42Capital expenditures


(125,814
)


(149,493
)


(182,678
)


(232,377
)


(266,836
) 11




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##### Table of Contents



As of
    December 31,(1)2005

2006

2007

2008

2009RMB

RMB

RMB

RMB

RMB(In millions, except for per share and per ADS data)Cash Flow DataNet cash flows from operating activities


207,656



202,701



207,633



172,465



261,972Net cash flows used for investing activities


(91,445
)


(159,065
)


(183,656
)


(211,797
)


(261,453
)Net cash flows from/used in financing activities


(46,083
)


(75,385
)


(5,838
)


3,777



53,077     (1)
    
    Due to business combinations under common control completed in
    2005, 2008 and 2009, the relevant financial statements of our
    company have been restated in a manner similar to a uniting of
    interests whereby the assets and liabilities acquired are
    accounted for at carryover predecessor values to the other party
    to the business combination with all periods presented as if our
    operations and the business acquired have always been combined.
    The difference between the consideration paid by us and the net
    assets or liabilities of the business acquired is adjusted
    against equity.(2)
    
    The basic and diluted earnings per share for the year ended
    December 31, 2005 was calculated by dividing the net profit
    with the weighted average number of 176,770 million shares
    issued and outstanding for the year presented. The basic and
    diluted earnings per share for the year ended December 31,
    2006 was calculated by dividing the net profit with the number
    of 179,021 million shares issued and outstanding for the
    year presented. The basic and diluted earnings per share for the
    year ended December 31, 2007 was calculated by dividing the
    net profit with the weighted average number of
    179,700 million shares issued and outstanding for the year
    presented. The basic and diluted earnings per share for the year
    ended December 31, 2008 was calculated by dividing the net
    profit with the number of 183,021 million shares issued and
    outstanding for the year presented. The basic and diluted
    earnings per share for the year ended December 31, 2009 was
    calculated by dividing the net profit with the number of
    183,021 million shares issued and outstanding for the year
    presented.(3)
    
    The basic and diluted earnings per ADS for the year ended
    December 31, 2005 was calculated by dividing net profit
    with the weighted average number of 176,770 million shares
    issued and outstanding for the year presented, each ADS
    representing 100 H Shares. The basic and diluted earnings per
    ADS for the year ended December 31, 2006 was calculated by
    dividing the net profit with the weighted average number of
    179,021 million shares issued and outstanding for the year
    presented, each ADS representing 100 H Shares. The basic and
    diluted earnings per ADS for the year ended December 31,
    2007 was calculated by dividing the net profit with the weighted
    average number of 179,700 million shares issued and
    outstanding for the year presented, each ADS representing 100 H
    Shares. The basic and diluted earnings per ADS for the year
    ended December 31, 2008 was calculated by dividing the net
    profit with the number of 183,021 million shares issued and
    outstanding for the year presented, each ADS representing 100 H
    Shares. The basic and diluted earnings per ADS for the year
    ended December 31, 2009 was calculated by dividing the net
    profit with the number of 183,021 million shares issued and
    outstanding for the year presented, each ADS representing 100 H
    Shares. Risk
    Factors    
    The global financial crisis and economic downturn have adversely
    affected economies and businesses around the world, including in
    China. Due to the global economical downturn and a decrease in
    consumer demand, the economic situation in China has been quite
    severe since the second half of 2008. Although the Chinese
    economy has recovered recently, it is uncertain whether such
    recovery will continue into the rest of 2010 and beyond. Any
    recurrence of the global financial crisis which may be sparked
    by the recent market volatility attributed to concerns over
    several European countries including Greece, Portugal, Ireland
    and Spain may cause a further decline in the PRC economy. This
    change in the macro-economic conditions has and is expected to
    continue to have an adverse impact on our business and
    operations. Our profitability may be adversely affected due to
    the low growth in oil and gas demand. We have experienced
    pricing pressure on 12




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##### Table of Contents



our refined products, which has an adverse effect on our
    profitability. These factors may also lead to intensified
    competition for market share and available margin, with
    consequential potential adverse effects on volumes. The
    financial and economic situation may have a negative impact on
    third parties with whom we do, or may do, business. Any of these
    factors may affect our results of operations, financial
    condition and liquidity.  
    In early 2003, several regions in Asia, including Hong Kong and
    China, were affected by the outbreak of SARS. Furthermore, in
    early 2008, severe snowstorms hit many areas of China and
    particularly affected southern China. Additionally, in May 2008,
    a major earthquake struck Chinas populous Sichuan
    Province, causing great loss of life, numerous injuries,
    property loss and disruption to the local economy. Finally, in
    April 2009, an outbreak of H1N1 influenza occurred in Mexico and
    the United States and human cases of swine flu were and continue
    to be discovered in China and Hong Kong. Any future outbreak of
    SARS, avian flu or similar adverse public health development or
    an increase in the severity of H1N1 influenza or other
    contagious diseases, extreme unexpected bad weather or severe
    natural disasters would adversely affect our business and
    operating results.
    Our operations are affected by the volatility of prices for
    crude oil and refined products. We and China Petroleum and
    Chemical Corporation, or Sinopec, set our crude oil median
    prices monthly based on the Singapore trading prices for crude
    oil. In 2006, the PRC government, under its macroeconomic
    controls, introduced a mechanism for determining domestic prices
    of refined products. On December 18, 2008, the PRC
    government further modified this mechanism by linking the
    domestic prices of refined oil products to a number of factors,
    including international market prices, average domestic
    processing cost, tax, selling expenses and appropriate profit
    margin. Historically, international prices for crude oil and
    refined products have fluctuated widely in response to changes
    in many factors, such as global and regional economic and
    political developments, and global and regional supply and
    demand for crude oil and refined products. We do not have, and
    will not have, control over the factors affecting international
    prices for crude oil and refined products. A decline in crude
    oil prices will reduce our crude oil revenues derived from
    external customers. If crude oil prices remain at a low level
    for a prolonged period, our company has to determine and
    estimate whether our oil and gas assets may suffer impairment
    losses and, if so, the amount of the impairment losses. An
    increase in crude oil prices may, however, increase the
    production costs of refined products. In addition, a decline in
    refined products prices will reduce our revenue derived from
    refining operations. An increase in the refined products prices,
    however, will increase the production costs of chemical products
    which use refined products as raw materials.    
    The crude oil and natural gas reserve data in this annual report
    are only estimates. The reliability of reserve estimates depends
    on a number of factors, assumptions and variables, such as the
    quality and quantity of our technical and economic data and the
    prevailing oil and gas prices applicable to our production, some
    of which are beyond our control and may prove to be incorrect
    over time. Results of drilling, testing and production after the
    date of the estimates may require substantial upward or downward
    revisions in our reserve data. Our actual production, revenues
    and expenditures with respect to our reserves may differ
    materially from these estimates because of these revisions.
    Our proved crude oil reserves decreased gradually and modestly
    from 2001 to 2003 because the decrease in the crude oil reserves
    in our Daqing and Liaohe oil regions could not be offset by the
    increase in the crude oil reserves in our oil regions in
    northwestern China, such as the Xinjiang oil region, the
    Changqing oil and gas region and the Tarim oil region. Our
    proved crude oil reserves increased slightly in 2004, 2005, 2006
    and 2007 compared to prior years. Our proved crude oil reserves
    slightly decreased in China in 2008 and 2009 as a result of the
    lower oil price in 2008 and 2009. We are actively pursuing
    business opportunities outside China to supplement our domestic
    resources. For instance, we acquired certain overseas crude oil
    and natural 13




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gas assets from CNPC. We cannot assure you, however, that we can
    successfully locate sufficient alternative sources of crude oil
    supply or at all due to the complexity of the international
    political, economic and other conditions. If we fail to obtain
    sufficient alternative sources of crude oil supply, our results
    of operations and financial condition may be materially and
    adversely affected.  
    The oil, gas and petrochemicals industries are highly
    competitive. There is strong competition, both within the oil
    and gas industry and with other industries, in supplying the
    fuel needs of commerce, industry and the home. Competition puts
    pressure on product prices, affects oil products marketing and
    requires continuous management focus on reducing unit costs and
    improving efficiency. The implementation of our growth strategy
    requires continued technological advances and innovation,
    including advances in exploration, production, refining,
    petrochemicals manufacturing technology and advances in
    technology related to energy usage. Our performance could be
    impeded if competitors developed or acquired intellectual
    property rights to technology that we required or if our
    innovation lagged the industry.
    Exploring for, producing and transporting crude oil and natural
    gas and producing and transporting refined products and chemical
    products involve many hazards. These hazards may result in:  
    fires;
    explosions;
    spills;
    blow-outs; and
    other unexpected or dangerous conditions causing personal
    injuries or death, property damage, environmental damage and
    interruption of operations.        
    As of December 31, 2009, CNPC beneficially owned
    approximately 86.285% of our share capital. This ownership
    percentage enables CNPC to elect our entire board of directors
    without the concurrence of any of our other shareholders.
    Accordingly, CNPC is in a position to:  
    control our policies, management and affairs;
    subject to applicable PRC laws and regulations and provisions of
    our articles of association, affect the timing and amount of
    dividend payments and adopt amendments to certain of the
    provisions of our articles of association; and
    otherwise determine the outcome of most corporate actions and,
    subject to the regulatory requirements of the jurisdictions in
    which our shares are listed, cause our company to effect
    corporate transactions without the approval of minority
    shareholders.    
    CNPC may choose to undertake, without our involvement, overseas
    investments and operations in the oil and gas industry,
    including exploration and production of oil and gas, refining
    and LNG projects. CNPCs overseas asset portfolio includes
    oil and gas development projects in Iran and Sudan, which
    countries are on the sanction list published and administrated
    by the Office of Foreign Assets Control, or OFAC, of the 14




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U.S. Department of Treasury. Certain
    U.S.-based
    investors may not wish to invest, and have proposed or adopted
    divestment or similar initiatives regarding investments, in
    companies that do business with countries on OFACs sanction
    list. These investors may not wish to invest, and may divest
    their investment, in us because of our relationship with CNPC
    and its investments and activities in those OFAC sanctioned
    countries. As a result, the trading prices of our ADSs may be
    materially and adversely affected.  
    In addition to its relationship with us as our controlling
    shareholder, CNPC by itself or through its affiliates also
    provides us with certain services and products necessary for our
    business activities, such as construction and technical
    services, production services and supply of material services.
    The interests of CNPC and its affiliates as providers of these
    services and products to us may conflict with our interests.
    Although we have entered into a Comprehensive Products and
    Services Agreement with CNPC and our transactions with CNPC over
    the past three years have been conducted on open, fair and
    competitive commercial terms, we have only limited leverage in
    negotiating with CNPC and its affiliates over the specific terms
    of the agreements for the future provision of these services and
    products.
    The eastern and southern regions of China have a higher demand
    for refined products and chemical products than the western and
    northern regions. Most of our refineries and chemical plants are
    located in the western and northern regions of China. We incur
    relatively higher transportation costs for delivery of our
    refined products and chemical products to certain areas of the
    eastern and southern regions from our refineries and chemical
    plants in western and northern China. While we continue to
    expand the sales of these products in the eastern and southern
    regions of China, we face strong competition from Sinopec and
    China National Offshore Oil Corp, or CNOOC. As a result, we
    expect that we will continue to encounter difficulty in
    increasing our sales of refined products and chemical products
    in these regions.
    We are currently constructing new, and expanding some existing,
    refinery and petrochemical facilities and constructing several
    natural gas and oil pipelines, which could require substantial
    capital expenditures and investments. We cannot assure you that
    the cash generated by our operations will be sufficient to fund
    these development plans or that our actual future capital
    expenditures and investments will not significantly exceed our
    current planned amounts. If either of these conditions arise, we
    may have to seek external financing to satisfy our capital
    needs. Our inability to obtain sufficient funding for our
    development plans could adversely affect our business, financial
    condition and results of operations.
    Compliance with changes in laws, regulations and obligations
    relating to climate change or environmental protection could
    result in substantial capital expenditure and reduced
    profitability from changes in operating costs.
    We are also subject to a number of risks relating to the PRC and
    the PRC oil and gas industry. These risks are described as
    follows:  
    Our operations, like those of other PRC oil and gas companies,
    are subject to extensive regulations and control by the PRC
    government. These regulations and control affect many material
    aspects of our operations, such as exploration and production
    licensing, industry-specific and product-specific taxes and fees
    and environmental and safety standards. As a result, we may face
    significant constraints on our ability to implement our business
    strategies, to develop or expand our business operations or to
    maximize our profitability. Our business may also be adversely
    affected by future changes in certain policies of the PRC
    government with respect to the oil and gas industry. For
    example, since March 26, 2006, we have been subject to a
    crude oil special gain levy imposed by the PRC government. On
    June 1, 2010, the Ministry of Finance and the State
    Administration of Taxation jointly promulgated a new resource
    tax regulation for the extraction of crude oil and natural gas.
    Pursuant to this regulation, effective from June 1, 2010,
    the resource tax payable by the resource tax payers in
    connection with their extraction of crude oil and natural gas in
    Xinjiang shall be collected based on value instead of volume. In
    the future if the Ministry of Finance and the State
    Administration of Taxation promulgate similar regulations
    applicable to any other provinces or regions in China, our
    results of operations may be adversely affected.
    Currently, the PRC government must approve the construction and
    major renovation of significant refining and petrochemical
    facilities as well as the construction of significant natural
    gas and refined 15




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product pipelines and storage facilities. We presently have
    several significant projects pending approval from the relevant
    government authorities and will need approvals from the relevant
    government authorities in connection with several other
    significant projects. We do not have control over the timing and
    outcome of the final project approvals.  
    We receive most of our revenues in Renminbi. A portion of our
    Renminbi revenues must be converted into other currencies to
    meet our foreign currency obligations. The existing foreign
    exchange limitations under the PRC laws and regulations could
    affect our ability to obtain foreign exchange through debt
    financing, or to obtain foreign exchange for capital
    expenditures. The value of Renminbi against U.S. dollar and
    other currencies may fluctuate and is affected by, among other
    things, changes in Chinas political and economic
    conditions. On July 21, 2005, the PRC government introduced
    a floating exchange rate system to allow the value of the
    Renminbi to fluctuate within a regulated band based on market
    supply and demand and by reference to a basket of foreign
    currencies. From July 21, 2005 to December 31, 2009,
    the value of the Renminbi has appreciated significantly against
    the U.S. dollar. The appreciation of Renminbi against
    U.S. dollar may cause a decrease in our exportation of our
    products.  
    A number of provinces and regions in which our oil and gas
    exploration and production activities are located have
    promulgated environment protection regulations, which set forth
    specific abandonment and disposal processes for oil and gas
    exploration and production activities. We have established
    standard abandonment procedures, including plugging all retired
    wells, dismantling all retired metering stations and other
    related facilities and performing site restoration, in response
    to the issuance of these provincial and regional regulations. As
    to the oil and gas properties that were retired prior to the
    issuance of such regulations, we believe that the activities
    required to retire these assets need not to be performed to the
    level that would be in compliance with the regulations and our
    internal policy. The costs associated with these activities have
    not been included in the asset retirement obligations accrued
    since the issuance of these regulations. However, the
    governments of these provinces and regions could enact new
    regulations, amend the current regulations or retroactively
    apply the relevant requirements. If any of these regulations is
    determined to be applicable to assets other than those that were
    retired subsequent to the dates that these regulations were
    issued, we could be required to incur substantial costs
    associated with such asset retirement obligations. In addition,
    there may be additional provincial governments to enact new
    regulations that may require our company to perform additional
    asset retirement activities related to the assets retired before
    the establishment of our companys internal policy and
    areas in which these assets were or continue to be located. Such
    potential new regulations could increase our asset retirement
    costs.
    Because PRC laws, regulations and legal requirements dealing
    with economic matters are relatively new and continue to evolve,
    and because of the limited volume of published judicial
    interpretations and the non-binding nature of prior court
    decisions, the interpretation and enforcement of these laws,
    regulations and legal requirements involve some uncertainty.
    Because the PRC Company Law is different in certain important
    aspects from company laws in the United States, Hong Kong and
    other common law jurisdictions, and because the PRC securities
    laws and regulations are still at an early stage of development,
    you may not enjoy shareholders protections that you may be
    entitled to in other jurisdictions.
    SEC, as required by Section 404 of the Sarbanes-Oxley Act
    of 2002, adopted rules requiring every public company in the
    United States to include a management report on such
    companys internal control over financial reporting in its
    annual report, which contains managements assessment of
    the effectiveness of the companys internal control over
    financial reporting. Although our management concluded that our
    internal control over our financial reporting for the fiscal
    year ended December 31, 2009 was effective, we may discover
    other deficiencies in the course of our future evaluation of our
    internal control over our financial reporting and may be unable
    to remediate such deficiencies in a timely manner. If we fail to
    maintain the adequacy of our internal control over financial
    reporting, we may not be able to conclude that we have effective
    internal control over financial reporting on an ongoing basis,
    in accordance with the Sarbanes-Oxley Act. Moreover, effective
    internal control is necessary for us to produce reliable
    financial reports and is important to prevent fraud. As a
    result, our failure to achieve and maintain effective internal
    control over financial reporting could result in the loss of
    investor confidence in the reliability of our financial
    statements, which in turn could harm our business and negatively
    impact the trading prices of our ADSs, H Shares or A Shares. 16




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ITEM 4 
    INFORMATION
    ON THE COMPANY Introduction  History
    and Development of Our Company
  Overview
    of Our Operations
    
    the exploration, development, production and sale of crude oil
    and natural gas;
    the refining of crude oil and petroleum products, as well as the
    production and marketing of basic petrochemical products,
    derivative chemical products and other chemical products;
    the marketing and trading of refined oil products; and
    the transmission of natural gas, crude oil and refined oil
    products as well as the sale of natural gas.         17




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Acquisitions
    dollar-for-dollar
   18




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dollar-for-dollar
        
    In May 2009, PetroChina International (Singapore) Pte. Ltd., an
    indirectly wholly owned subsidiary of our company, acquired from
    Keppel Oil and Gas Services Pte Ltd approximately 45.51% share
    capital in Singapore Petroleum Company Limited (SPC)
    and completed the mandatory general cash offer for all the
    remaining shares in the capital of SPC in October, 2009;
    In November 2009, Mangistau Investments B.V., a joint venture
    equally owned by CNPC E&D and JSC National Company
    KazMunayGas, acquired 100% of the common shares of
    JSC Mangistaumunaigas, which is one of the major oil-producing
    companies in Kazakhstan. CNPC E&D is 50% owned by our
    company;
    In February 2010, PetroChina International Investment Company
    Limited, a subsidiary of our company, and Canadas
    Athabasca Oil Sands Corp. (AOSC) entered into a
    share purchase agreement, a joint venture agreement, a
    shareholder agreement, a loan agreement and a put/call option
    agreement for the acquisition of the oil sand asset projects of
    AOSC; and 19




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##### Table of Contents




    In March 2010, CS CSG (Australia) Pty Ltd entered into an
    acquisition agreement with Arrow Energy Limited
    (Arrow) for the acquisition of all the shares in
    Arrow. Arrow is an Australian integrated energy company focusing
    on the development of coal seam gas throughout eastern Australia
    and Asia. CS CSG (Australia) Pty Ltd is a joint venture equally
    owned by PetroChina International (Singapore) Pte. Ltd. and
    Shell Energy Holdings Australia Ltd.  Our
    Corporate Organization and Shareholding Structure
      
    (1)
    
    Indicates approximate shareholding.(2)
    
    Indicates approximate shareholding, including the 155,120,000 H
    Shares indirectly held by CNPC through Fairy King Investments
    Limited, an overseas wholly owned subsidiary of CNPC, as of
    December 31, 2009.(3)
    
    Includes PetroChina Planning & Engineering Institute,
    PetroChina Exploration & Development Research
    Institute, IT Service Center, PetroChina Petrochemical Research
    Institute and several other companies. 20




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21




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##### Table of Contents



General
    Information
  (86-10) 5998-6223.
   22




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23




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Exploration
    and Production        Reserves
  barrels-of-oil barrels-of-oil barrels-of-oil barrels-of-oil
      New
    SEC Reserve Disclosures
    
    Economic producibility of reserves and discounted cash flows are
    now based on a
    12-month
    unweighted average commodity price unless contractual
    arrangements designate the price to be used. 24




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##### Table of Contents




    Probable and possible reserves may be disclosed separately on a
    voluntary basis.
    Reserves may be classified as proved undeveloped if there is a
    high degree of confidence that the quantities will be recovered
    and they are scheduled to be drilled within the next five years,
    unless the specific circumstances justify a longer time.
    Reserves may be estimated through the use of reliable technology
    in addition to flow tests and production history.
    Additional disclosure is required regarding the qualifications
    of the chief technical person who oversees the reserves
    estimation process. We are also required to provide a general
    discussion of our internal controls used to assure the
    objectivity of the reserves estimate.
    Reserves in foreign countries or continents must be presented
    separately if they represent more than 15% of our total oil and
    gas proved reserves.
    The definition of oil and gas producing activities has expanded
    and focuses on the marketable product rather than the method of
    extraction.    Internal
    Controls Over Reserves Estimates
    
    formulation of reserve development strategies;
    arrangement of annual reserves; and
    review of the reserve assessment results.      Third-Party
    Reserve Report
     25




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##### Table of Contents



Crude Oil

Natural
    Gas(1)

Combined(1)(Millions of barrels)

(Bcf)

(BOE, in millions)Proved developed and undeveloped reservesReserves as of December 31, 2007


11,705.6



57,110.6



21,223.9Revisions of previous estimates


(574.0
)


(636.3
)


(680.0
)Extensions and discoveries


885.4



6,579.0



1,982.0Improved recovery


75.0



0



75.0Production for the year


(870.7
)


(1,864.1
)


(1,181.4
)Reserves as of December 31, 2008


11,221.3



61,189.2



21,419.5Revisions of previous estimates


(192.6
)


(1,272.8
)


(404.6
)Extensions and discoveries


1,004.5



5,439.6



1,911.1Improved recovery


72.9



0



72.9Production for the year


(843.5
)


(2,112.2
)


(1,195.7
)Reserves as of December 31, 2009


11,262.6



63,243.8



21,803.2Proved developed reservesAs of December 31, 2007


9,047.1



26,047.1



13,388.3As of December 31, 2008


8,324.1



26,666.8



12,768.6As of December 31, 2009


7,870.8



30,948.8



13,038.9Proved undeveloped reservesAs of December 31, 2007


2,658.5



31,063.5



7,835.6As of December 31, 2008


2,897.2



34,522.4



8,650.9As of December 31, 2009


3,391.8



32,295.0



8,774.3     (1)
    
    Represents natural gas remaining after field separation for
    condensate removal and reduction for flared gas. 26




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##### Table of Contents



As of December 31,2007


2008


2009Proved





Proved





ProvedDeveloped





Developed





Developedand


Proved


and


Proved


and


ProvedUndeveloped


Developed


Undeveloped


Developed


Undeveloped


Developed(Millions of barrels)Crude oil reservesDaqing


3,856.1



3,324.3



3,548.0



2,912.0



3,463.4



2,740.8Liaohe


1,121.0



888.1



895.9



675.2



795.7



581.8Xinjiang


1,354.9



1,198.9



1,302.6



1,106.6



1,395.1



1,117.6Changqing


1,488.9



1,194.8



1,624.5



1,256.7



1,783.8



1,298.8Jilin


784.2



463.4



819.8



441.0



771.6



393.4Dagang


523.2



346.7



520.8



352.7



602.9



364.9Tarim


590.3



379.7



594.0



371.3



584.8



277.0Huabei


448.0



307.0



431.5



281.8



487.9



298.5Qinghai


200.1



186.3



177.8



157.5



176.6



146.5Tuha


164.7



91.7



162.3



97.8



134.6



87.9Sichuan


9.5



4.4



13.1



3.6



19.9



3.5Jidong


413.1



126.0



379.2



133.5



314.0



95.0Other
    regions(1)


751.5



535.8



751.8



534.4



732.3



465.1Total


11,705.6



9,047.1



11,221.3



8,324.1



11,262.6



7,870.8   As of December 31,2007


2008


2009Proved





Proved





ProvedDeveloped





Developed





Developedand


Proved


and


Proved


and


ProvedUndeveloped


Developed


Undeveloped


Developed


Undeveloped


Developed(Bcf)Natural gas
    reserves(2)Sichuan


10,400.5



4,365.5



11,285.4



4,030.4



11,177.3



4,219.0Changqing


19,105.0



6,943.9



19,261.7



6,901.6



20,363.2



9,884.4Xinjiang


1,537.1



999.3



4,061.8



2,028.7



3,497.9



2,156.6Daqing


3,039.7



1,046.2



2,961.1



960.6



3,028.1



1,261.4Qinghai


4,352.8



3,003.5



4,302.1



2,948.4



4,903.2



3,554.9Tarim


15,114.3



7,918.8



15,516.4



7,722.7



16,892.1



7,758.3Liaohe


386.4



296.2



283.2



193.6



133.9



100.5Tuha


581.6



350.4



609.4



382.3



589.8



397.0Huabei


193.1



119.2



207.8



133.7



140.0



119.6Dagang


347.4



197.1



289.7



148.9



261.7



93.1Jilin


1,169.9



104.1



1,180.5



113.4



1,177.0



450.6Jidong


191.4



40.4



203.3



96.7



137.5



31.8Other
    regions(1)


691.4



662.5



1,026.8



1,005.8



942.1



921.6Total


57,110.6



26,047.1



61,189.2



26,666.8



63,243.8



30,948.8     (1)
    
    Represents Yumen and other oil regions and our overseas oil and
    gas fields as a result of our acquisition of overseas assets.(2)
    
    Represents natural gas remaining after field separation for
    condensate removal and reduction for flared gas. 27




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##### Table of Contents



Exploration
    and Development
      Year



Daqing

Xinjiang

Liaohe

Changqing

Huabei

Dagang

Sichuan

Others(1)

Total2007

Net exploratory wells
    drilled(2)


294



183



68



447



104



70



48



415



1,629Crude oil


103



103



49



186



47



59



3



141



691Natural gas


12



15







41











30



16



114Dry(3)


179



65



19



220



57



11



15



258



824Net development wells
    drilled(2)


4,670



1,350



529



3,087



528



260



83



2,377



12,884Crude oil


4,643



1,346



515



2,652



259



252



8



2,208



11,883Natural gas


17



4



11



384



269



8



75



163



931Dry(3)


10







3



51















6



702008

Net exploratory wells
    drilled(2)


234



162



63



583



94



91



67



354



1,648Crude oil


71



72



38



207



42



69



2



136



637Natural gas


1



15



0



26



0



0



38



12



92Dry(3)


162



75



25



350



52



22



27



206



919Net development wells
    drilled(2)


4,238



1,887



356



5,079



415



238



100



2,887



15,200Crude oil


4,223



1,868



349



4,469



225



226



2



2,685



14,047Natural gas


4



18



6



528



186



8



77



179



1,006Dry(3)


11



1



1



82



4



4



21



23



1472009

Net exploratory wells
    drilled(2)


306



149



77



688



77



67



61



369



1,794Crude oil


297



140



77



540



77



67



2



258



1,458Natural gas


9



9



0



148



0



0



59



111



336Dry(3)


227



69



58



331



27



22



29



278



1,041Net development wells
    drilled(2)


4,924



681



93



7,288



299



155



147



1,516



15,103Crude oil


4,923



674



84



6,808



224



148



8



1,162



14,031Natural gas


1



7



9



480



75



7



139



354



1,072Dry(3)


10



0



0



133



0



0



23



5



171     (1)
    
    Represents the Jilin, Tarim, Tuha, Qinghai, Jidong, Yumen and
    other oil regions.(2)
    
    Net wells refer to the wells after deducting
    interests of others. No third parties own any interests in any
    of our wells.(3)
    
    Dry wells are wells with insufficient reserves to
    sustain commercial production. 28




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##### Table of Contents



Oil-and-Gas
    Properties
    Acreage(1)Productive
    Wells(1)


Developed


UndevelopedOil Region

Crude Oil


Natural Gas


Crude Oil


Natural Gas


Crude Oil


Natural Gas(Thousands of acres)Daqing


46,044



252



839.2



85.3



811.0



112.6Liaohe


17,454



658



194.8



35.9



92.9



6.4Xinjiang


19,792



134



304.1



52.0



167.6



27.2Jilin


16,159



197



304.7



34.1



322.0



19.6Changqing


23,397



3,853



548.5



2,202.8



537.4



2,725.5Huabei


5,710



110



148.9



12.3



65.4



2.9Dagang


3,503



72



107.4



24.5



87.8



21.4Tuha


1,727



114



51.5



24.8



24.4



10.7Tarim


1,025



249



107.0



75.7



62.7



275.3Sichuan


423



1,826



335.5



401.3







520.9Other
    regions(2)


5,526



517



74.5



32.5



58.9



25.2Total


140,760



7,982



3,016.1



2,981.1



2,230.1



3,747.8     (1)
    
    Includes all wells and acreage in which we have an interest. No
    third parties own any interests in any of our wells or acreage.(2)
    
    Represents the Qinghai, Jidong and Yumen and other oil regions.    Production
    For the Year EndedDecember 31,

% of2007

2008

2009

2009 TotalCrude oil
    production(1)(thousands of barrels per day, except percentages or otherwise
    indicated)Daqing


847.3



813.2



806.2



34.9Liaohe


231.3



224.6



202.4



8.8Xinjiang


249.4



246.9



220.5



9.5Changqing


246.9



279.8



318.1



13.8Tarim


131.6



132.7



112.2



4.9Huabei


90.8



89.7



86.3



3.7Jilin


120.0



121.2



115.5



5.0 29




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##### Table of Contents



For the Year EndedDecember 31,

% of2007

2008

2009

2009 TotalDagang


91.2



92.2



87.8



3.8Tuha


44.8



46.7



32.8



1.4Other(2)


264.5



332.0



329.2



14.2Total


2,317.8



2,379.0



2,311.0



100Annual production (million barrels)


846.0



870.7



843.5Average sales price(RMB per barrel)


496.3



608.1



368.2(US$ per barrel)


65.27



87.55



53.9Natural gas
    production(1)(3)(millions of cubic feet per day, except percentages or otherwise
    indicated)Sichuan


1,329.8



1,364.6



1,381.4



23.9Changqing


838.4



1,024.5



1,434.1



24.8Daqing


123.7



136.0



156.5



2.7Qinghai


286.0



378.1



378.1



6.5Tuha


111.5



107.0



94.0



1.6Xinjiang


102.3



129.9



173.4



3.0Liaohe


43.9



40.8



38.7



0.7Huabei


39.1



38.9



45.1



0.8Tarim


1,383.1



1,564.1



1,650.3



28.5Dagang


43.0



44.2



43.1



0.7Other(4)


158.7



265.2



392.0



6.8Total


4,459.5



5,093.3



5,786.7



100Annual production (Bcf)


1,627.7



1,864.2



2,112.2Average sales price(RMB per Mcf)


29.2



32.8



32.7(US$ per Mcf)


3.84



4.72



4.78     (1)
    
    Production volumes for each region include our share of the
    production from all of our cooperative projects with foreign
    companies in that region.(2)
    
    Represents production from the Qinghai, Jidong, Yumen and other
    oil regions and our share of overseas production as a result of
    our acquisition of overseas assets.(3)
    
    Represents production of natural gas for sale.(4)
    
    Represents production from the Jilin, Jidong, Yumen and other
    oil regions and our share of overseas production as a result of
    our acquisition of overseas assets.  barrel-of-oil barrel-of-oil barrel-of-oil
 30




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##### Table of Contents



Principal
    Oil and Gas Regions
  Daqing
    Oil Region
    reserve-to-production
        
    implementing ground optimization and simplification projects and
    reducing investments with low or no return so as to control cost
    from the source; and
    applying new technologies to reduce energy consumption to
    increase our ability to maximize profit.       31




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##### Table of Contents



Liaohe
    Oil Region
    reserve-to-production
    Xinjiang
    Oil Region
    reserve-to-production
  Sichuan
    Gas Region
  reserve-to-production
      Changqing
    Oil and Gas Region
   32




---



##### Table of Contents



reserve-to-production
    Tarim
    Oil and Gas Region
     33




---



##### Table of Contents



34




---



##### Table of Contents



Refining
    and Chemicals        
    as of December 31, 2009, our refineries annual
    primary distillation capacity totaled 975 million barrels
    of crude oil per year, or 2,671.2 thousand barrels per day;
    we processed 828.6 million barrels of crude oil, or
    2.3 million barrels per day; and
    we produced approximately 73.2 million tons of gasoline,
    diesel and kerosene.  Refining
  Refined
    Products
    Year Ended December 31,Product

2007


2008


2009(In thousands of tons)Diesel


47,345.4



48,294.4



48,827.7Gasoline


22,018.7



23,465.2



22,114.3Fuel oil


4,162.0



4,076.5



3,057.1Naphtha


7,491.9



7,225.8



8,041.2Asphalt


1,563.4



2,093.3



2,307.1Kerosene


2,017.2



2,208.8



2,252.9Lubricants


1,760.4



1,767.9



1,401.1Paraffin


1,003.0



948.5



770.5Total


87,362.0



90,080.4



88,771.9     Our
    Refineries
  and/or
 35




---



##### Table of Contents



As of December 31,2007


2008


2009Primary distillation
    capacity(1)

    (thousand barrels per day)Lanzhou Petrochemical


212.6



212.6



212.6Dalian Petrochemical


415.0



415.0



415.0Fushun Petrochemical


186.2



186.2



236.9Dushanzi Petrochemical


121.5



121.5



202.4Daqing Petrochemical


121.5



121.5



121.5Jinzhou Petrochemical


131.6



131.6



131.6Jinxi Petrochemical


131.6



131.6



131.6Jilin Petrochemical


141.7



141.7



141.7Urumqi Petrochemical


121.5



121.5



121.5Other refineries


996.9



996.9



956.4Total


2,580.1



2,580.1



2,671.2Refining throughput(thousand barrels per day)Lanzhou Petrochemical


213.9



202.3



211.6Dalian Petrochemical


233.5



267.2



281.5Fushun Petrochemical


196.6



193.1



187.9Dushanzi Petrochemical


81.2



90.0



120.9Daqing Petrochemical


124.3



117.1



124.7Jinzhou Petrochemical


133.6



132.5



117.2Jinxi Petrochemical


133.6



126.8



79.9Jilin Petrochemical


146.1



136.3



144.9Urumqi Petrochemical


106.1



110.3



106.3Other refineries


887.6



946.4



895.3Total


2,256.5



2,322.0



2,270.2   As of December 31,2007


2008


2009Conversion
    equivalent(2)

    (percent)Lanzhou Petrochemical


53.3



53.3



53.3Dalian Petrochemical


27.8



44.9



44.9Fushun Petrochemical


70.7



70.7



55.6Dushanzi Petrochemical


41.7



41.7



57.0Daqing Petrochemical


76.7



80.0



80.0Jinzhou Petrochemical


84.6



84.6



84.6Jinxi Petrochemical


66.2



66.2



66.2Jilin Petrochemical


61.4



61.4



61.4Urumqi Petrochemical


51.7



51.7



56.7Average of other refineries


53.2



55.5



56.9     (1)
    
    Represents the primary distillation capacity of crude oil and
    condensate. 36




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##### Table of Contents



(2)
    
    Stated in fluid catalytic cracking, delayed coking and
    hydrocracking equivalent/ topping (percentage by weight), based
    on 100% of balanced distillation capacity.        Chemicals
   37




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##### Table of Contents



Our
    Chemical Products
    Year Ended December 31,2007

2008

2009(In thousand tons)Basic petrochemicalsPropylene


3,083.2



3,152.4



3,278.0Ethylene


2,581.5



2,675.6



2,988.9Benzene


827.8



943.5



1,021.7Derivative petrochemicalsSynthetic resinPolyethylene


2,101.2



2,153.7



2,434.1Polypropylene


1,630.2



1,730.0



1,800.9ABS


215.0



198.9



201.8Other synthetic resin products


16.1



16.9



43.5Synthetic fiberPolyacrylic fiber


79.3



61.6



72.6Terylene fiber


48.1



35.7



19.6Other synthetic fiber products


9.3



9.0



8.0Synthetic rubberStyrene butadiene rubber


210.6



249.6



300.8Other synthetic rubber products


100.0



94.4



119.3IntermediatesAlkylbenzene


197.5



205.4



176.6Other chemicalsUrea


3,634.5



3,823.7



3,973.3        38




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##### Table of Contents



Marketing
    of Chemicals
      Year Ended December 31,Product

2007

2008

2009(In thousands of tons)Derivative petrochemicalsSynthetic resinPolyethylene


2,102.4



2,194.9



2,350.5Polypropylene


1,434.8



1,549.1



1,939.0ABS


216.7



327.1



302.4Synthetic fiberTerylene fiber


56.6



41.7



18.7Polyacrylic fiber


71.6



67.5



107.5Synthetic rubberButadiene styrene rubber


219.0



233.8



327.0IntermediatesAlkylbenzene


156.6



164.6



165.4Other chemicalsUrea


3,662.2



4,393.2



4,054.1  39




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##### Table of Contents



40




---



##### Table of Contents



Marketing      
    Approximately 837 regional wholesale distribution outlets
    nationwide. Substantially all of these outlets are located in
    high demand areas such as economic centers across China,
    particularly in the coastal areas, along major railways and
    along the Yangtze River; and
    16,607 service stations owned and operated by us and 655
    franchise service stations owned and operated by third parties.      Year Ended December 31,Product

2007


2008


2009(In thousands of tons)Diesel


54,376.9



56,081.0



64,659.4Gasoline


27,003.1



29,399.4



30,777.1Kerosene


3,781.8



4,797.6



5,816.9Lubricants


2,378.4



2,003.4



1,795.8   Wholesale
    Marketing
    Retail
    Marketing
      
   41




---



##### Table of Contents



Owned and operated by
    us(1)


16,607Franchised


655Total


17,262     (1)
    
    Includes 462 service stations owned and operated by BP
    PetroChina Petroleum Company Limited.   42




---



##### Table of Contents



43




---



##### Table of Contents



Natural
    Gas and Pipeline      As of December 31 or YearEnded December 31,2007

2008

2009Total length of natural gas pipelines (km)


22,043



24,037



28,595Total length of crude oil pipeline (km)


10,559



11,028



13,164Total length of refined oil products pipeline (km)


2,669



2,656



8,868Total volume of natural gas
    sold(1)

    (Bcf)


1,538.7



1,802.8



2,105.1     (1)
    
    Representing the natural gas sold to third parties  Our
    Principal Markets for Natural Gas
             44




---



##### Table of Contents



Natural
    Gas Transmission Infrastructure
      West
    to East Natural Gas Pipelines
      take-or-pay
    Zhong
    County to Wuhan Municipality natural gas pipeline
    take-or-pay
 45




---



##### Table of Contents



The
    First and Second Shaanxi to Beijing Municipality natural gas
    pipelines
    take-or-pay
        Crude Oil
    and Refined Product Transportation and Storage
    Infrastructure
         46




---



##### Table of Contents




    13,164 kilometers of crude oil pipelines with an average daily
    throughput of approximately 3.03 million barrels; and
    crude oil storage facilities with an aggregate storage capacity
    of approximately 21.7 million cubic meters.      
    8,868 kilometers of refined product pipelines with an average
    daily throughput of approximately 48,803 tons; and
    refined product storage facilities with a total storage capacity
    of approximately 26.0 million cubic meters.     Competition    Exploration
    and Production Operations
   47




---



##### Table of Contents



Refining
    and Chemicals Operations and Marketing Operations
      Natural
    Gas and Pipeline Operations
   Environmental
    Matters    
    require an environmental evaluation report to be submitted and
    approved prior to the commencement of exploration, production,
    refining and chemical projects;
    restrict the type, quantities, and concentration of various
    substances that can be released into the environment in
    connection with drilling and production activities;
    limit or prohibit drilling activities within protected areas and
    certain other areas; and 48




---



##### Table of Contents




    impose penalties for pollution resulting from oil, natural gas
    and petrochemical operations, including criminal and civil
    liabilities for serious pollution.        
    building environment-friendly projects;
    reducing sulphur levels in heavy fuel oil and diesel fuel;
    reducing olefin and benzene content in gasoline, and
    continuously reducing the quantity of emissions and effluents
    from our refineries and petrochemical plants; and
    developing and installing monitoring systems at our pollutant
    discharge openings and developing environmental impact
    assessments for construction projects.      
    providing each household in areas surrounding our production
    facilities with printed materials to explain and illustrate
    safety and protection knowledge and skills; and
    enhancing the implementation of various effective safety
    production measures we have adopted previously.   Legal
    Proceedings   49




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##### Table of Contents



Properties    
    CNPC would use its best endeavors to obtain formal land use
    right licenses to replace the entitlement certificates in
    relation to the 28,649 parcels of land, which were leased or
    transferred to us from CNPC, within one year from August,
    September and October 1999 when the relevant entitlement
    certificates were issued;
    CNPC would complete, within one year from November 5, 1999,
    the necessary governmental procedures for the requisition of the
    collectively owned land on which 116 service stations owned by
    us are located; and
    CNPC would obtain individual building ownership certificates in
    our name for all of the 57,482 buildings transferred to us by
    CNPC, before November 5, 2000.     Intellectual
    Property  
   Regulatory
    Matters  Overview
    
    The Ministry of Land and Resources has the authority for
    granting, examining and approving oil and gas exploration and
    production licenses, the administration of registration and
    transfer of exploration and production licenses.
    The Ministry of Commerce:  
    sets the import and export volume quotas for crude oil and
    refined products according to the overall supply and demand for
    crude oil and refined products in China as well as the WTO
    requirements for China; 50




---



##### Table of Contents




    issues import and export licenses for crude oil and refined
    products to oil and gas companies that have obtained import and
    export quotas; and
    examines and approves production sharing contracts and
    Sino-foreign equity and cooperative joint venture contracts.  
    The National Development and Reform Commission:  
    has the industry administration and policy coordination
    authority over Chinas oil and gas industry;
    determines mandatory minimum volumes and applicable prices of
    natural gas to be supplied to certain fertilizer producers;
    publishes guidance prices for natural gas and retail median
    guidance prices for certain refined products, including gasoline
    and diesel;
    approves significant petroleum, natural gas, oil refinery and
    chemical projects set forth under the Catalogues of Investment
    Projects Approved by the Central Government; and
    approves Sino-foreign equity and cooperative projects exceeding
    certain capital amounts.  Exploration
    Licenses and Production Licenses
         51




---



##### Table of Contents



Pricing
  Crude
    Oil
    Refined
    Products
      Measures for
    Administration of Petroleum Price
  Chemical
    Products
    Natural
    Gas
   52




---



##### Table of Contents



Production
    and Marketing
  Crude
    Oil
   53




---



##### Table of Contents



Refined
    Products
    Natural
    Gas
    Foreign
    Investments
  Cooperation
    in Exploration and Production with Foreign
    Companies
        Transportation
    and Refining
    Import
    and Export
   54




---



##### Table of Contents



Capital
    Investment and Financing
                  Taxation,
    Fees and Royalty
    Tax Item

Tax Base

Tax RateEnterprise income tax

Taxable income

Effective January 1, 2008, charged at the legal rate of 25%.
    However, certain of our qualified operations in west regions of
    the PRC are entitled to a rate of 15% prior to 2010.Value-added tax

Turnover

13% for liquified natural gas, natural gas, liquified petroleum
    gas, agricultural film and fertilizers and 17% for other items.Sales volume

5% for the Sino-foreign oil and gas exploration and development
    cooperative projects. However input value-added tax cannot be
    deducted.Business tax

Income from transportation services

3%Consumption tax

Aggregate volume sold or self-consumed

Effective January 1, 2009, the unit tax amount of the
    consumption tax for refined oil products was increased as
    follows:RMB1.0 per liter for unleaded gasolineRMB0.8 per liter for diesel. 55




---



##### Table of Contents



Tax Item

Tax Base

Tax RateRMB1.0 per liter for naphtha, solvent naphtha and lubricants.RMB0.8 per liter for fuel oilResource tax

Aggregate volume sold or self-consumed

Effective July 1, 2005, resource tax applicable to crude oil of
    our company was adjusted upward from the original RMB8 to 30 per
    ton to RMB14 to 30 per ton, and the resource tax for
    natural gas was adjusted from the original RMB2 to 15 per
    thousand cubic meter to RMB7 to 15 per thousand cubic meter.The actual applicable rate for each oil field may differ,
    depending on the resource differences, volume of the exploration
    and production activities and costs required for the production
    at the particular oil field.Effective from June 1, 2010, the resource tax payable by the
    resource tax payers in connection with their extraction of crude
    oil and natural gas in Xinjiang shall be collected based on
    value at the rate of 5%. The amount of the resource tax payable
    = sales value × tax rate. Taxpayers shall be eligible for a
    reduced resource tax rate in connection with their extraction of
    viscous oil, high pour-point oil, and high sour natural gas as
    well as enhanced oil recovery.Compensatory fee for mineral resources

Turnover

1% for crude oil and natural gasCrude oil special gain levy

Sales amount above specific threshold

Effective March 26, 2006, levied on the domestic crude oil sold
    at or above US$40/barrel, with a five-level progressive tax
    rates, varying from 20% to 40%Exploration license fee

Area

RMB100 to 500 per square kilometer per yearProduction license fee

Area

RMB1,000 per square kilometer per yearRoyalty
    fee(1)

Production volume

Progressive rate of 0-12.5% for crude oil and 0-3% for natural
    gas     (1)
    
    Payable only by Sino-foreign oil and gas exploration and
    development cooperative projects. The project entity of those
    cooperative projects is not subject to any other resource tax or
    fee.  Circular on Implementing
    the Reform of Refined Oil Product Pricing and Relevant Tax and
    Charge Collection
 56




---



##### Table of Contents



Environmental
    Regulations
      ITEM 4A 
    UNRESOLVED
    STAFF COMMENTS    ITEM 5 
    OPERATING
    AND FINANCIAL REVIEW AND PROSPECTS General    Overview
    
    the exploration, development, production and sale of crude oil
    and natural gas;
    the refining of crude oil and petroleum products, and the
    production and marketing of basic petrochemical products,
    derivative chemical products and other chemical products;
    marketing and trading of refined oil products; and
    the transmission of natural gas, crude oil and refined oil
    products as well as the sale of natural gas.    Factors
    Affecting Results of Operations
  period-to-period
 57




---



##### Table of Contents



Crude
    Oil Prices
      Median Prices for Principal Grades ofCrude Oil (RMB/Barrel)

Premium/(Discount)Year 2007

Year 2008

Year 2009

(RMB/Barrel)Grade of Crude Oil

Benchmark

Average

Average

Average

2007

2008

2009Daqing


Cinta



536



701



390



(3.8
)


(3.8
)


(3.8
)Jidong


Cinta



536



701



390



(3.8
)


(3.8
)


(3.8
)Huabei


Cinta



536



701



390



(3.9
)


(3.9
)


(3.9
)Dagang


Duri



512



651



350



(4
)


(4
)


(4
)Tarim


Cinta



536



701



390



(51
)


(51
)


(51
)Tuha


Minas



571



729



418



(36
)


(36
)


(36
)     Refined
    Product Prices
   58




---



##### Table of Contents



90(#)

0(#)Date

Gasoline

Diesel(RMB/ton)

(RMB/ton)January 15, 2009


(140
)


(160
)March 25, 2009


290



180June 10, 2009


400



400June 30, 2009


600



600July 29, 2009


(220
)


(220
)September 2, 2009


300



300September 30, 2009


(190
)


(190
)November 10, 2009


480



480April 14, 2010


320



320June 1, 2010


(230
)


(220
)   Chemical
    Product Prices
    Natural
    Gas Prices
      Foreign
    Currency Exposure
    Interest
    Rate Exposure
    Critical
    Accounting Policies
   59




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##### Table of Contents



Accounting
    for Oil and Gas Exploration and Production
    Activities
    Oil
    and Gas Reserves
       60




---



##### Table of Contents



Property,
    Plant and Equipment
      Buildings and plant






8-40 yearsEquipment and machinery






4-30 yearsMotor vehicles






4-14 yearsOther






5-12 years     and/or
     61




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##### Table of Contents



Provision
    for Asset Decommissioning
   Operating
    Results      Year Ended December 31,2007


2008


2009(RMB in millions)Turnover


837,542



1,072,604



1,019,275Operating expenses


(636,525
)


(913,033
)


(875,831
)Profit from operations


201,017



159,571



143,444Exchange gain (loss), net


(751
)


(1,081
)


(783
)Interest expense, net


(1,572
)


(767
)


(3,813
)Share of profit of affiliates and jointly controlled entities


6,445



4,290



1,184Profit before income tax expense


205,139



162,013



140,032Income tax expense


(49,802
)


(35,211
)


(33,473
)Profit for the year attributable to non-controlling interest


(8,541
)


(12,349
)


(3,172
)Profit for the year attributable to owners of the company


146,796



114,453



103,387     2008





2009vs.





vs.2007


2008


2007


2009


2008(RMB in millions, except percentages)TurnoverExploration and production


473,117



626,367



32.4
%


405,326



(35.3
%Refining and chemicals


481,726



560,729



16.4
%


501,300



(10.6
)%Marketing


584,115



778,141



33.2
%


768,295



(1.3
)%Natural gas and pipeline


50,066



63,315



26.5
%


77,658



22.7
%Other


1,718



1,418



(17.5
)%


1,372



(3.2
)%Total


1,590,742



2,029,970



27.6
%


1,753,951



(13.6
)%Less intersegment sales


(753,200
)


(957.366
)


27.1
%


(734,676
)


(23.3
)%Consolidated net sales from operations


837,542



1,072,604



28.1
%


1,019,275



(5.0
)%  62




---



##### Table of Contents



2008





2009vs.





vs.2007


2008


2007


2009


2008(RMB in millions, except percentages)Profit (loss) from operationsExploration and production


207,749



240,470



15.8
%


105,019



(56.3
)%Refining and chemicals


(23,659
)


(93,830
)






17,308



Marketing


10,810



7,982



(26.2
)%


13,265



66.2
%Natural gas and pipeline


12,495



16,057



28.5
%


19,046



18.6
%Other


(6,378
)


(11,108
)






(11,194
)


Total


201,017



159,571



(20.6
)%


143,444



(10.1
)%   Year
    Ended December 31, 2009 Compared to Year Ended
    December 31, 2008
  Consolidated
    Results of Operations
  Overview
    Turnover.
    Sales Volume (000 ton)

Average Realized Price (RMB/ton)Percentage of





Percentage of2009

2008

Change (%)

2009

2008

Change (%)Crude oil*


53,768



38,603



39.3



2,750



4,348



(36.8
)Natural gas (million cubic
    metre, RMB/000 cubic metre)


59,614



51,054



16.8



814



813



0.1Gasoline


30,777



29,399



4.7



5,763



5,881



(2.0
)Diesel


64,659



56,081



15.3



4,965



5,526



(10.2
)Kerosene


5,817



4,798



21.2



3,896



6,355



(38.7
)Heavy oil


8,472



7,061



20.0



2,903



3,541



(18.0
)Polyethylene


2,349



2,195



7.0



8,430



10,219



(17.5
)Lubricant


1,796



2,003



(10.3
)


7,204



7,515



(4.1
)     *
    
    The crude oil listed above represents all the external sales
    volume of crude oil of the company. 63




---



##### Table of Contents



Operating Expenses.
  Purchases, Services and Other
    Expenses.
  Employee Compensation Costs.
  Exploration Expenses.
  Depreciation, Depletion and
    Amortization.
  Selling, General and Administrative
    Expenses.
  Taxes Other than Income Taxes.
  Other Incomes/(Expenses), net.
  Profit from Operations.
  Net Exchange Loss.
  Net Interest Expenses.
 64




---



##### Table of Contents



Profit before Income Tax
    Expense.
  Income Tax Expense.
  Profit for the Year.
  Profit Attributable to Non-controlling Interest of the
    Company.
  Profit Attributable to Owners of the
    Company.
  Exploration
    and Production
  Turnover.
  Operating Expenses.
  Profit from Operations.
  Refining
    and Chemicals
  Turnover.
  Operating Expenses.
  Profit/Loss from Operations.
  Marketing
  Turnover.
 65




---



##### Table of Contents



Operating Expenses.
  Profit from Operations.
  Natural
    Gas and Pipeline
  Turnover.
  Operating Expenses.
  Profit from Operations.
  Year
    Ended December 31, 2008 Compared to Year Ended
    December 31, 2007
  Consolidated
    Results of Operations
  Overview
    Turnover.
 66




---



##### Table of Contents



Sales Volume (000 ton)

Average Realized Price (RMB/ton)Percentage of





Percentage of2008

2007

Change (%)

2008

2007

Change (%)Crude oil*


38,603



29,154



32.4



4,348



3,659



18.8Natural gas (million cubic metre, RMB/000 cubic metre)


51,054



43,570



17.2



813



693



17.3Gasoline


29,399



27,003



8.9



5,881



5,168



13.8Diesel


56,081



54,377



3.1



5,526



4,668



18.4Kerosene


4,798



3,782



26.9



6,355



4,684



35.7Heavy oil


7,061



8,772



(19.5
)


3,541



2,519



40.6Polyethylene


2,195



2,102



4.4



10,219



10,497



(2.6
)Lubricant


2,003



2,378



(15.8
)


7,515



6,420



17.1     *
    
    The crude oil listed above represents all the external sales
    volume of crude oil of the company.  Operating Expenses.
  Purchases, Services and Other
    Expenses.
  Employee Compensation Costs.
  Exploration Expenses.
  Depreciation, Depletion and
    Amortisation.
  Selling, General and Administrative
    Expenses.
 67




---



##### Table of Contents



Taxes Other than Income Taxes.
  Other Incomes/(Expenses), net.
  Profit from Operations.
  Net Exchange Loss.
  Net Interest Expenses.
  Profit before Income Tax
    Expense.
  Income Tax Expense.
  Profit Attributable to Owners of the
    Company.
  Exploration
    and Production
  Turnover.
    Operating Expenses.
  Profit from Operations.
 68




---



##### Table of Contents



Refining
    and Chemicals
  Turnover.
    Operating Expenses.
  Loss from Operations.
  Marketing
  Turnover.
  Operating Expenses.
  Profit from Operations.
  Natural
    Gas and Pipeline
  Turnover.
  Operating Expenses.
  Profit from Operations.
 Liquidity
    and Capital Resources   69




---



##### Table of Contents



Year Ended December 31,2007


2008


2009(RMB in millions)Net cash flows from operating activities


207,663



172,465



261,972Net cash flows used for investing activities


(183,656
)


(211,797
)


(261,453
)Net cash flows from financing activities


(5,838
)


3,777



53,077Currency translation difference


(221
)


(112
)


179Cash and cash equivalents at year end


68,817



33,150



86,925    70




---



##### Table of Contents



Net Cash
    Flows from Operating Activities
      Net Cash
    Flows Used for Investing Activities
      Net Cash
    Flows from Financing Activities
        December 31,2007


2008


2009(RMB in millions)Short-term debt (including current portion of long-term debt)


31,578



93,670



148,851Long-term debt


40,067



32,852



85,471Total debt


71,645



126,522



234,322Less:Cash and cash equivalents


68,817



33,150



86,925Net debt


2,828



93,372



147,397  71




---



##### Table of Contents



Capital
    Expenditures and Investments
      20102007

2008

2009

Anticipated(RMB in



(RMB in



(RMB in



(RMB inmillions)

%

millions)

%

millions)

%

millions)

%Exploration and
    production(1)


135,351



74.1



157,194



67.6



129,017



48.4



157,700



53.9Refining and chemicals


21,499



11.8



30,619



13.2



42,558



15.9



49,500



16.9Marketing


13,212



7.2



4,974



2.1



18,174



6.8



19,600



6.7Natural gas and pipeline


11,003



6.0



36,848



15.9



74,754



28.0



62,000



21.2Corporate and other


1,613



0.9



2,742



1.2



2,333



0.9



3,900



1.3Total


182,678



100.0



232,377



100.0



266,836
(2)


100.00



292,700



100.00     (1)
    
    If investments related to geological and geophysical exploration
    costs are included, the capital expenditures and investments for
    the exploration and production segment for 2008 and 2009, and
    the estimates for the same in 2010 would be
    RMB168,732 million, RMB138,396 million and
    RMB169,000 million, respectively.(2)
    
    The capital expenditure for 2009 has excluded the consideration
    for the acquisition of Singapore Petroleum Company Limited in
    the amount of Singapore dollars
    (S$)3,239 million (approximately
    RMB15,296 million).    Exploration
    and Production
   72




---



##### Table of Contents



Refining
    and Chemicals
      
    approximately RMB26,400 million for the construction and
    expansion of our refining facilities, mainly including the
    construction of large-sized refining projects in Sichuan
    Petrochemical and Huhhot Petrochemical; and
    approximately RMB23,100 million for the construction of our
    chemical facilities, mainly including the large-sized ethylene
    projects at Sichuan Petrochemical, Fushun Petrochemical and
    Daqing Petrochemical.  Marketing
      Natural
    Gas and Pipeline
  West-to-East Lanzhou-Zhengzhou-Changsha
  West-to-East
  Others
   73




---



##### Table of Contents



Off-Balance
    Sheet Arrangements   Long-Term
    Contractual Obligations and Other Commercial
    Commitments and Payment Obligations      Payment Due by PeriodLess Than





AfterContractual Obligations

Total

1 Year

1-3 Years

3-5 Years

5 Years(RMB in millions)Long-term debt


99,700



14,229



49,473



25,560



10,438Capital lease obligations


















Operating leases


93,934



4,071



6,383



6,095



77,385Capital commitments


56,657



44,306



11,996



65



290Unconditional purchase obligations


1,817



796



836



60



125Other long-term obligations


















Total contractual cash obligations


252,108



63,402



68,688



31,780



88,238   Amount of Commitment Expiration per PeriodTotalAmounts

Less Than





OverOther Commercial Commitments

Committed

1 Year

1-3 Years

3-5 Years

5 Years(RMB in millions)Lines of credit


















Standby letters of credit


















Guarantees


21







21







Total commercial commitments


21







21







     Year

Annual Payment(RMB in millions)2010


1,0002011


1,0002012


1,0002013


1,0002014


1,000  74




---



##### Table of Contents



Assets
    Retirement Obligation
   Research
    and Development      Exploration
    and Production
    
    theories and technologies of crude oil and natural gas
    exploration;
    oil and gas development and surface engineering technology;
    oil and gas production and pipeline transportation; and
    security, energy conservation and environment protection.  Refining
    and Chemicals
    
    technology for clean refined oil products;
    core technology for heavy oil processing;
    technology for developing high quality and high value synthetic
    resin products;
    high performance synthetic rubber products; and
    production technology for low cost chemical raw materials. Trend
    Information     75




---



##### Table of Contents



Other
    Information  Inflation
    Related
    Party Transactions
    Environmental
    Expenses
    Recent
    Developments in IFRS
      acquisition-by-acquisition
    held-for-sale  held-for-sale
   76




---



##### Table of Contents



ITEM 6 
    DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES Directors,
    Senior Management and Supervisors  his/her
  
    convening shareholders meetings and reporting its work to
    the shareholders meetings;
    implementing the resolutions of the shareholders meetings;
    determining our business plans and investment plans;
    formulating our annual budget and final accounts;
    formulating our proposals for dividend and bonus distributions
    and for the increase or reduction of capital; and
    exercising other powers, functions and duties as conferred by
    our articles of association.    his/her
  
    attending board meetings;
    examining our financial affairs; 77




---



##### Table of Contents




    examining balance sheets, profit and loss accounts, business
    reports, dividend distribution proposals and other financial
    information proposed at shareholders meetings by the
    directors from time to time; and
    overseeing the actions of our board of directors and our senior
    management personnel in carrying out their duties.      Name

Age


Position

Date of
    Election(1)Jiang Jiemin


54


Chairman of the board of directors


May 15, 2008Zhou Jiping


57


Vice Chairman of the board of directors and president


May 15, 2008Wang Yilin


53


Director


May 15, 2008Zeng Yukang


59


Director


May 15, 2008Wang Fucheng


59


Director


May 15, 2008Li Xinhua


56


Director


May 15, 2008Liao Yongyuan


47


Director and vice president


May 15, 2008Wang Guoliang


57


Director


May 15, 2008Jiang Fan


46


Director


May 15, 2008Chee-Chen Tung


67


Independent non-executive director


May 15, 2008Liu Hongru


79


Independent non-executive director


May 15, 2008Franco Bernabè


61


Independent non-executive director


May 15, 2008Li Yongwu


65


Independent non-executive director


May 15, 2008Cui Junhui


63


Independent non-executive director


May 15, 2008Li Hualin


47


Vice President and Secretary to the board of directorsSun Longde


47


Vice presidentShen Diancheng


50


Vice presidentLiu Hongbin


46


Vice presidentZhou Mingchun


42


Chief financial officerZhao Zhengzhang


53


Vice presidentBo Qiliang(2)


47


Chief engineerSun Bo(2)


49


Vice PresidentLin Aiguo


51


Chief engineerWang Daofu


54


Chief geologistHuang Weihe


52


Chief engineerChen Ming


59


Chairman of the supervisory boardWen Qingshan


51


SupervisorSun Xianfeng


57


SupervisorYu Yibo


46


SupervisorWang Yawei


55


SupervisorQin Gang


56


SupervisorWang Shali


55


SupervisorLi Yuan


62


Independent supervisorWang
    Daocheng(3)


69


Independent supervisor  78




---



##### Table of Contents



(1)
    
    For directors only.(2)
    
    Mr. Bo Qiliang and Mr. Sun Bo were appointed as Vice
    Presidents of our company from January 2010.(3)
    
    Mr. Wang Daocheng has been acting as our independent
    supervisor since May 2009.  Directors
  Jiang Jiemin,
  Zhou Jiping,
  Wang Yilin,
  Zeng Yukang,
  Wang Fucheng,
 79




---



##### Table of Contents



Li Xinhua,
  Liao Yongyuan,
  Wang Guoliang,
  Jiang Fan,
  Independent
    Non-executive Directors
  Chee-Chen Tung,
 80




---



##### Table of Contents



Liu Hongru,
  Franco Bernabè,
  Li Yongwu,
  Cui Junhui,
 81




---



##### Table of Contents



Secretary
    to the Board of Directors
  Li Hualin,
  Other
    Senior Management Personnel
  Sun Longde,
  Shen Diancheng,
  Liu Hongbin,
 82




---



##### Table of Contents



Zhou Mingchun,
  Zhao Zhengzhang,
  Bo Qiliang,
  Sun Bo,
  Lin Aiguo,
 83




---



##### Table of Contents



Wang Daofu,
  Huang Weihe, West-to-East West-to-East West-to-East
  Supervisors
  Chen Ming,
  Wen Qingshan,
  Sun Xianfeng,
 84




---



##### Table of Contents



Yu Yibo,
  Wang Yawei,
  Qin Gang,
  Wang Shali,
  Li Yuan,
 85




---



##### Table of Contents



Wang Daocheng,
 Compensation  Senior
    Management Compensation System
    Directors
    and Supervisors Compensation
             Board
    Practices   86




---



##### Table of Contents



Audit
    Committee
    
    supervising the integrity of financial reporting process to
    ensure fair, transparent and true financial disclosure;
    reviewing and evaluating the effectiveness of the internal
    control and risk management framework;
    inspecting and supervising the effectiveness of the internal
    audit functions;
    reviewing and supervising the engagement and work of external
    auditors, including evaluating the performance of external
    auditors annually and raising proposals together with the
    supervisory board to the shareholders meetings with
    respect to the engagement, re-engagement and dismissal of
    external auditors and the compensation of such external auditors;
    receiving, keeping and dealing with complaints regarding
    accounting, internal control or auditing matters; and
    receiving and dealing with anonymous submissions and complaints
    by employees regarding accounting or auditing matters, and
    keeping such submission and complaints confidential, and other
    duties from time to time provided by applicable laws and
    regulations and listing rules of the market where the securities
    of our company listed.  Investment
    and Development Committee
    
    studying the long-term development strategies of the company as
    proposed by our president and making recommendations to the
    board of directors;
    studying the annual investment budget and the adjustment
    proposal regarding the investment plan as proposed by our
    president and making recommendations to the board of directors;
    reviewing preliminary feasibility studies and feasibility
    studies for material investment and financing proposals,
    material capital operation projects and material asset operation
    projects subject to the approval of the board of directors and
    making recommendations to the board of directors; and
    studying any other significant matters that may affect the
    development of the company and making recommendations to the
    board of directors.  Evaluation
    and Remuneration Committee
    
    studying the criteria for and conducting the evaluation of the
    performance of the directors and the management members and
    making recommendations to the board of directors;
    studying and reviewing the director and management compensation
    policies and proposals, including the policies and proposals
    regarding the compensation payable to directors and senior
    management for their loss of positions or retirement; 87




---



##### Table of Contents




    organizing the evaluation of the performance of our president
    and reporting the evaluation result to the board of directors,
    supervising the evaluation of the performance of our senior vice
    presidents, vice presidents, chief financial officer and other
    senior management members conducted under the leadership of the
    president; and
    studying our incentive plan, compensation plan and stock
    appreciation rights plan, supervising and evaluating the
    implementation of these plans and making recommendations for
    improvements to and perfection of such plans.  Health,
    Safety and Environment Committee
    
    supervising the effective implementation of our Health, Safety
    and Environmental Protection Plan (HSE Plan);
    making recommendations to the board of directors and our
    president for major decisions or major issues with respect of
    health, safety and environmental protection that may affect the
    company; and
    inquiring the occurrence of and responsibilities for material
    accidents with respect to the operation, property and assets,
    employees and other facilities of the company, and supervising
    the treatment of such accidents. Employees    Employees

% of TotalExploration and production


265,499



49.24Refining and chemicals


178,689



33.15Marketing


68,803



12.76Natural gas and pipeline


20,667



3.83Other(1)


5,510



1.02Total


539,168



100.0     (1)
    
    Including the numbers of employees of the management of our
    headquarters, specialized companies, PetroChina
    Exploration & Development Research Institute,
    PetroChina Planning & Engineering Institute,
    Petrochemical Research Institute and other units.     Share
    Ownership   88




---



##### Table of Contents



ITEM 7 
    MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS  Major
    Shareholders        Percentageof theIssued Share

PercentageCapital of the

ofSame

the TotalNumber of Shares

Class of

ShareName of Shareholders

Class of Shares

Held

Shares (%)

Capital (%)CNPC


A shares



157,764,597,259



97.432



86.200     Percentage ofSuch Sharesin That Class

Percentage ofClass of



of the Issued

Total ShareName of Shareholder

Shares

Number of Shares

Share Capital (%)

Capital (%)CNPC


H shares



271,120,000(1
)


1.285



0.148JPMorgan Chase & Co.


H shares



1,132,355,050(2
)


5.37



0.62     (1)
    
    Held by Fairy King Investments Limited, an overseas wholly-owned
    subsidiary of CNPC.(2)
    
    Includes (i) 61,594,980 shares held by JPMorgan
    Chase & Co. through various subsidiaries in short
    position in its capacity as beneficial owner and (ii)
    1,070,760,070 shares held by JPMorgan Chase & Co.
    through various subsidiaries in long position in its capacity as
    beneficial owner, investment manager and custodian/approved
    lending agent under Hong Kong laws.  Related
    Party Transactions    One-off
    Related Party Transactions
  Acquisition
    of City Gas Business from CNPC
   89




---



##### Table of Contents



Acquisition
    of Western Pipeline Assets of CNPC
  dollar-for-dollar
  Acquisition
    of 100% Equity Interest in South Oil from CNPC
    Acquisition
    of the Refinery Equipment Assets from CNPC
  dollar-for-dollar
  Acquisition
    of the Contractual Rights under the Production Sharing Contract
    from CNPC
    Acquisition
    of the Equity Interest in Zhongqing Gas from CNPC
   90




---



##### Table of Contents



Subscription
    of Additional Share Capital of China Petroleum Finance Co., Ltd
    (CPF)
    Continuing
    Related Party Transactions
  Form 20-F
    Form 20-F
  Loans
    from Related Parties
   Interests
    of Experts and Counsel   91




---



##### Table of Contents



ITEM 8 
    FINANCIAL INFORMATION Financial
    Statements    Dividend
    Policy
      
    general business conditions;
    our financial results;
    capital requirements;
    contractual restrictions on the payment of dividends by us to
    our shareholders or by our subsidiaries to us;
    our shareholders interests;
    the effect on our debt ratings; and
    other factors our board of directors may deem relevant.    
    recovery of losses, if any;
    allocations to the statutory common reserve fund; and
    allocations to a discretionary common reserve fund if approved
    by our shareholders.      
    providing our shareholders with a competitive return on
    investment; and
    assuring sufficient reinvestment of profits to enable us to
    achieve our strategic objectives.   92




---



##### Table of Contents



Significant
    Changes  Operating
    and Financial Results in the First Quarter of 2010
  year-on-year.
 93




---



##### Table of Contents



ITEM 9 
    THE OFFER AND LISTING Nature of
    the Trading Market and Market Price Information        Price Per HShare

Price Per ADS

Price Per A ShareHK$

US$

RMBHigh

Low

High

Low

High

LowAnnual Data2005


7.35



4.025



94.50



51.65







2006


11.12



6.35



142.12



83.50







2007


19.90



8.57



263.70



109.55



43.96



29.242008


14.24



4.25



182.12



57.25



31.31



9.952009


10.48



5.10



133.65



64.09



16.38



10.02Quarterly Data2008First quarter


14.24



9.17



182.12



120.63



31.31



16.99Second quarter


12.12



9.77



156.97



125.92



18.35



14.94Third quarter


10.66



7.45



136.92



92.79



15.63



10.17Fourth quarter


8.14



4.25



104.30



57.25



12.19



9.952009First quarter


7.82



5.10



101.25



64.09



12.16



10.02Second quarter


9.41



6.11



122.78



80.98



14.48



11.22Third quarter


9.49



7.66



122.34



101.31



16.38



12.57Fourth quarter


10.48



8.52



133.65



109.67



14.16



12.982010First quarter


10.18



8.25



130.51



106.30



14.28



12.65Monthly Data2009December


9.92



8.97



128.01



116.43



13.99



13.06  94




---



##### Table of Contents



Price Per H Share


Price Per ADS


Price Per A ShareHK$


US$


RMBHigh


Low


High


Low


High


Low2010January


10.18



8.80



130.51



111.49



14.28



13.08February


9.13



8.25



116.58



106.30



13.05



12.70March


9.25



8.75



119.82



111.78



13.06



12.65April


9.55



8.92



122.67



113.26



13.23



11.92May


8.99



7.97



115.74



101.92



11.97



10.73June (through June 18, 2010)


8.99



8.1



115.57



104.04



11.05



10.34    ITEM 10 
    ADDITIONAL INFORMATION Memorandum
    and Articles of Association  Our
    Articles of Association Currently in Effect
  Form 20-F.
  Objectives
    and Purposes
    Enforceability
    of Shareholders Rights
    
    between a holder of H Shares and us;
    between a holder of H Shares and any of our directors,
    supervisors, president, senior vice presidents, vice presidents,
    chief financial officer or other senior officers; or
    between a holder of H Shares and a holder of domestic shares,
    arising from any provision of the articles of association, any
    right or obligation conferred or imposed by the PRC Company Law
    or any other relevant law or administrative regulation which
    concerns our affairs must, with certain exceptions, be referred
    to arbitration at either the China International Economic and
    Trade Arbitration Commission in the PRC or the Hong Kong
    International Arbitration Center. Our articles of association
    provide that such arbitration will be final and conclusive.   95




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##### Table of Contents



Restrictions
    on Transferability and the Share Register
      
    any relevant transfer fee is paid;
    the instrument of transfer is accompanied by the share
    certificates to which it relates, or such other evidence is
    given as may be reasonably necessary to show the right of the
    transferor to make the transfer;
    the instrument of transfer is in respect of one class of shares
    only; and
    the transfer is conducted in accordance with the laws and
    administrative regulations of or required by the securities
    exchanges on which the shares are listed.    he/she his/her
      30-day
 96




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##### Table of Contents



Dividends
      
    recovery of losses, if any and the statutory common reserve fund
    is not enough to recover such losses;
    allocations to the statutory common reserve fund; and
    allocations to a discretionary common reserve fund if approved
    by the shareholders.        Voting
    Rights and Shareholders Meetings
    
    where the number of directors is less than the number stipulated
    in the PRC Company law or two-thirds of the number specified in
    our articles of association;
    where our unrecovered losses reach one-third of the total amount
    of our share capital;
    where shareholders individually or in the aggregate holding 10%
    or more of our issued and outstanding voting shares request in
    writing the convening of an extraordinary general meeting;
    where our board deems necessary or our supervisory board so
    request; or
    any other events provided by applicable laws, administrative
    regulations, rules or the articles of association of our company.   97




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##### Table of Contents




    an increase or reduction of our share capital or the issue of
    shares of any class, warrants and other similar securities;
    the issue of our debentures;
    our division, merger, dissolution and liquidation;
    amendments to our articles of association; 98




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##### Table of Contents




    any purchase or sale of significant assets or any guarantee
    provided by our company within one year exceeding 30% of our
    most recent audited aggregate assets;
    stock incentive plans; and
    any other matters required by applicable laws, administrative
    regulations or our articles of association, or considered by the
    shareholders in a general meeting and which they have resolved
    by way of an ordinary resolution to be of a nature which may
    have a material impact on us and should be adopted by special
    resolution.          Board
    of Directors
                         99




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##### Table of Contents



he/she his/her he/she he/she
    
    not to cause us to exceed the scope of business stipulated in
    our business license;
    to act honestly in our best interests;
    not to expropriate our property in any way, including, without
    limitation, usurpation of opportunities which benefit
    us; and
    not to expropriate the individual rights of shareholders,
    including, without limitation, rights to distributions and
    voting rights, save and except according to a restructuring
    which has been submitted to the shareholders for their approval
    in accordance with the articles of association.    
    a duty, in the exercise of such persons powers and
    discharge of such persons duties, to exercise the care,
    diligence and skill that a reasonably prudent person would
    exercise in comparable circumstances;
    a fiduciary obligation, in the exercise of our powers entrusted
    to him or her, not to place himself or herself in a position
    where his or her duty to us and his or her interests may
    conflict; and
    a duty not to direct a person or entity related or connected to
    a director, supervisor, president, vice president or senior
    officer in certain relationships enumerated in the articles of
    association to act in a manner which such director, supervisor,
    president, vice president or senior officer is prohibited from
    doing.    Supervisory
    Board
    
    to review the periodic reports prepared by the board of
    directors and issue written opinions in connection with such
    review; 100




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##### Table of Contents




    to verify financial reports and other financial information
    which have been prepared by the board and which are proposed to
    be presented at shareholders meetings;
    to oversee our directors, president, vice presidents and other
    senior officers in order to prevent such persons from abusing
    their authority or infringing upon our interest; and
    to contact with the directors on behalf of our company, or bring
    lawsuits against the directors, president, senior vice
    president, vice president, chief financial officer or any other
    executive officers pursuant to Article 152 of the PRC
    Company Law.        Restrictions
    on Large or Controlling Shareholders
    
    to relieve a director or supervisor from his or her duty to act
    honestly in our best interests;
    to approve the expropriation by a director or supervisor of our
    assets in any way, including, without limitation, opportunities
    which may benefit us; or
    to approve the expropriation by a director or supervisor of the
    individual rights of other shareholders, including, without
    limitation, rights to distributions and voting rights, except
    according to a restructuring of our company which has been
    submitted for approval by the shareholders in a general meeting
    in accordance with our articles of association.      
    is in a position to elect more than one-half of the board of
    directors;
    has the power to exercise, or to control the exercise of, 30% or
    more of our voting rights;
    holds 30% or more of our issued and outstanding shares; or
    has de facto control of us in any other way.   101




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Material
    Contracts   Foreign
    Exchange Controls    
    debt service on foreign currency-denominated debt;
    purchases of imported equipment and materials; and
    payment of any dividends declared in respect of the H Shares.         Taxation    PRC
    Taxation
  Dividends
    and Individual Investors
  Notice Concerning the Taxation of Gains on
    Transfer and Dividends from Shares (Equities) Received by
    Foreign Investment Enterprises, Foreign Enterprises and Foreign
    Individuals
  Individual Income Tax Law of the
    PRC
 102




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##### Table of Contents



Dividends
    and Foreign Enterprises
  Enterprise Income
    Tax Law of the PRC
  Enterprise Income Tax Law of the PRC Circular on Issues
    Concerning the Withholding of Corporate Income Tax by PRC
    Resident Enterprises from Dividends Payable to H Share
    Non-resident Corporate Shareholders
  Tax
    Treaties
    
    the United States;
    Australia;
    Canada;
    France;
    Germany;
    Japan;
    Malaysia;
    Singapore;
    the United Kingdom; and
    the Netherlands.  Measures for the Administration of the Enjoyment by
    Non-residents of the Treatments under the Tax Treaties
  Capital
    Gains
  Individual Income Tax Law of the
    PRC, Provisions
    for Implementing the Individual Income Tax Law of the PRC
 103




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##### Table of Contents



Circular of the
    Ministry of Finance and the State Administration of Taxation
    concerning Several Preferential Policies for Enterprise Income
    Tax Circular of the Ministry of Finance and the State
    Administration of Taxation concerning Several Preferential
    Policies for Enterprise Income Tax
  Circular of the
    State Administration of Taxation on Printing and Issuing the
    Interim Measures for Administration of Withholding at Source of
    Income Tax of Non-resident Enterprises
  Additional
    PRC Tax Considerations
    United
    States Federal Income Taxation
    
    tax-exempt entities;
    certain insurance companies;
    broker-dealers;
    traders in securities that elect to mark to market;
    U.S. holders liable for alternative minimum tax;
    U.S. holders that own 10% or more of our voting stock;
    U.S. holders that hold the H Shares or ADSs as part of a
    straddle or a hedging or conversion transaction; or
    U.S. holders whose functional currency is not the
    U.S. dollar. 104




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##### Table of Contents




    a citizen or resident of the United States for United States
    federal income tax purposes;
    a corporation, or other entity treated as a corporation for
    United States federal income tax purposes, created or organized
    under the laws of the United States or any political subdivision
    thereof;
    an estate the income of which is subject to United States
    federal income tax without regard to its source; or
    a trust:  
    subject to the primary supervision of a United States court and
    the control of one or more United States persons; or
    that has elected to be treated as a United States person under
    applicable United States Treasury regulations.      We urge you to consult your tax advisors regarding the United
    States federal, state, local and
    non-United
    States tax consequences of the purchase, ownership and
    disposition of the H Shares or ADSs.
    Distributions
    on the H Shares or ADSs
    
    a foreign corporation that is eligible for the benefits of a
    comprehensive income tax treaty with the United States that
    includes an exchange of information program; or
    a foreign corporation if its stock with respect to which a
    dividend is paid (or ADSs backed by such stock) is readily
    tradable on an established securities market within the United
    States,   105




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##### Table of Contents



non-United
  Sale,
    Exchange or Other Disposition
      PFIC
    Rules
    
    75% or more of its gross income consists of passive income, such
    as dividends, interest, rents and royalties; or
    50% or more of the average quarterly value of its assets
    consists of assets that produce, or are held for the production
    of, passive income.   106




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##### Table of Contents



Backup
    Withholding and Information Reporting
    
    are a corporation or fall within various other exempt
    categories, and, when required, demonstrate this fact; or
    provide a correct taxpayer identification number on a properly
    completed IRS
    Form W-9
    or a substitute form, certify that you are exempt from backup
    withholding and otherwise comply with applicable requirements of
    the backup withholding rules.   107




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Recent
    Legislative Developments
   Documents
    on Display  Form 20-F 1-800-SEC-0330
  Form 20-F.
 ITEM 11 
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISK      Interest
    Rate Risk
    Foreign
    Exchange Rate Risk
     108




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##### Table of Contents



December 31,
    2009
  Percentageto TotalExpected Maturity Date


Long-Term


Fair2010


2011


2012


2013


2014


Thereafter


Total


Debt (%)


Value(RMB equivalent in millions, except percentages)Long term debtLoans in RMBFixed rate


233



221



5560











26



6,040



6.06
%


5,824Average interest rate


4.64
%


4.78
%


4.32
%










2.91
%










Variable
    rate(1)


11,306



135



68



33



552



6,045



18,139



18.19
%


18,139Average interest rate


4.90
%


5.38
%


5.33
%


5.40
%


6.03
%


3.07
%










Loans in EurosFixed rate


16



16



16



16



15



113



192



0.19
%


65Average interest rate


2.12
%


2.12
%


2.12
%


2.12
%


2.12
%


2.11
%










Variable rate


































Average interest rate


































Loans in United States DollarsFixed rate


37



37



37



37



37



1,225



1,410



1.41
%


1,517Average interest rate


1.43
%


1.43
%


1.43
%


1.43
%


1.43
%


5.95
%










Variable rate


2,456



9,632



1,580



83



8,287



2,735



24,733



24,85
%


24,733Average interest rate


1.00
%


1.95
%


2.54
%


1.91
%


1.80



1.72
%










Loans in Japanese YenFixed rate


10























10



0.01
%


10Average interest rate


2.42
%






























Variable rate


































Average interest rate


































Debentures in United States DollarFixed Rate


171



171















294



636



0.64
%


630Average interest rate


9.50
%


9.50
%














3.00
%










Debentures in RMBFixed rate






2,000







1,500











3,500



3.51
%


3,516Average interest rate






3.76
%






4.11
%


















Medium term note in RMBFixed rate










30,000







15,000







45,000



45.14
%


43,587Average interest rate










2.49
%






3.35
%














Total


14,229



12,212



37,261



1,669



23,891



10,438



99,700



100.00
%


98,061  109




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##### Table of Contents



December 31,
    2008
  Percentageto TotalExpected Maturity Date


Long-Term


Fair2009


2010


2011


2012


2013


Thereafter


Total


Debt (%)


Value(RMB equivalent in millions, except percentages)Long term debtLoans in RMBFixed rate


2



2















3



7



0.02
%


5Average interest rate


0



7.47
%














0











Variable
    rate(1)


5,220



11,351



274



20







6,000



22,865



59.59
%


22,865Average interest rate


6.07
%


5.51
%


5.84
%


6.20
%






6.26
%










Loans in EurosFixed rate


15



17



17



16



16



126



207



0.54
%


147Average interest rate


2.11
%


2.12
%


2.12
%


2.12
%


2.12
%


2.10
%










Variable rate


































Average interest rate


































Loans in United States DollarsFixed rate


66



37



37



37



37



416



630



1.64
%


367Average interest rate


3.88
%


1.43
%


1.43
%


1.43
%


1.43
%


1.38
%










Variable rate


63



3,826



2,805



248



254



3,132



10,328



26.92
%


10,328Average interest rate


2.36
%


2.80
%


2.88
%


6.23
%


6.15
%


2.94
%










Loans in Japanese YenFixed rate


7



13



















20



0.05
%


19Average interest rate


2.42
%


2.42
%


























Variable rate


































Average interest rate


































Debentures in United States DollarsFixed rate


171



171



171











301



814



2.12
%


758Average interest rate


9.50
%


9.50
%


9.50
%










3.00
%










Debentures in RMBFixed rate










2,000







1,500







3,500



9.12
%


3,262Average interest rate










3.76
%






4.11
%














Total


5,544



15,417



5,304



321



1,807



9,978



38,371



100.00
%


37,751   December 31,
    2007
  Percentageto TotalExpected Maturity Date


Long-Term


Fair2008


2009


2010


2011


2012


Thereafter


Total


Debt (%)


Value(RMB equivalent in millions, except percentages)Long term debtLoans in RMBFixed rate


272







2







1







275



0.53
%


254Average interest rate


3.83
%






0







0















Variable
    rate(1)


7,280



5,220



11,182



10



20



8,700



32,412



62.45
%


32,412Average interest rate


5.49
%


5.07
%


5.46
%


6.89
%


6.89
%


5.84
%










Loans in EurosFixed rate


16



16



16



16



16



167



247



0.48
%


163Average interest rate


2.12
%


2.12
%


2.12
%


2.12
%


2.12
%


2.10
%










Variable rate


































Average interest rate


































 110




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##### Table of Contents



Percentageto TotalExpected Maturity Date


Long-Term


Fair2008


2009


2010


2011


2012


Thereafter


Total


Debt (%)


Value(RMB equivalent in millions, except percentages)Loans in United States DollarsFixed rate


137



79



45



39



39



468



807



1.56
%


539Average interest rate


5.25
%


3.62
%


1.44
%


1.43
%


1.43
%


1.38
%










Variable rate


4,234



249



2,629



77



3,431



2,867



13,487



25.99
%


13,487Average interest rate


4.92
%


5.33
%


5.07
%


5.50
%


7.40
%


5.12
%










Loans in Japanese YenFixed rate


20



9



8















37



0.07
%


36Average interest rate


3.40
%


2.42
%


2.42
%






















Variable rate


































Average interest rate


































Debentures in United States DollarsFixed rate


241



181



184



183







334



1,123



2.17
%


1,123Average interest rate


10.83
%


9.50
%


9.50
%


9.50
%






3.30
%










Debentures in RMBFixed rate














2,000







1,500



3,500



6.75
%


2,981Average interest rate














3.76
%






4.11
%










Total


12,200



5,754



14,066



2,325



3,507



14,036



51,888



100.00
%


50,995     (1)
    
    Due to the declining interest rates in recent years in China,
    the PRC government has implemented a program to adjust interest
    rates on certain fixed RMB loans periodically to reflect the
    market rates in effect published by the Peoples Bank of
    China, or the PBOC, from time to time. As a result, these
    previously fixed RMB loans are categorized as variable rate
    loans as of December 31, 2007, 2008 and 2009. The newly
    adjusted rates usually become effective one year after the
    announcement by the PBOC. The average interest rates on these
    loans are calculated based on the then effective rates as of
    December 31, 2007, 2008 and 2009, respectively.  Commodity
    Price Risk
   111




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##### Table of Contents



ITEM 12 
    DESCRIPTION OF SECURITIES OTHER THAN EQUITY
    SECURITIES  Fees paid
    by our ADS holders
    Persons Depositing or Withdrawing Shares Must Pay:

For:$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)

Issuance of ADSs, including issuances resulting from a
    distribution of shares or rights or other propertyCancellation of ADSs for the purpose of withdrawal, including if
    the deposit agreement terminates$0.02 (or less) per ADS

Any cash distribution to ADS registered holdersA fee equivalent to the fee that would be payable if securities
    distributed to you had been shares and the shares had been
    deposited for issuance of ADSs

Distribution of securities distributed to holders of deposited
    securities which are distributed by the depositary to ADS
    registered holdersRegistration or transfer fees

Transfer and registration of shares on our share register to or
    from the name of the depositary or its agent when you deposit or
    withdraw sharesExpenses of the depositary

Cable, telex and facsimile transmissions (when expressly
    provided in the deposit agreement)Converting foreign currency to U.S. dollarsTaxes and other governmental charges the depositary or the
    custodian have to pay on any ADS or share underlying an ADS, for
    example, stock transfer taxes, stamp duty or withholding taxes

As necessaryAny charges incurred by the depositary or its agents for
    servicing the deposited securities

As necessary   Fees and
    Payments from the Depositary to Us
   PART II ITEM 13 
    DEFAULTS, DIVIDENDS ARREARAGES AND
    DELINQUENCIES   ITEM 14 
    MATERIAL MODIFICATIONS TO THE RIGHTS TO SECURITY HOLDERS AND
    USE OF PROCEEDS   112




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##### Table of Contents



ITEM 15 
    CONTROLS AND PROCEDURES  Evaluation
    of the Management on Disclosure Controls and
    Procedures
  Rules 13a-15(e)
  Managements
    Report on Internal Control over Financial Reporting
  Rules 13a-15(f). Internal Control  Integrated Framework
      Changes
    in Internal Control over Financial Reporting
   ITEM 16A 
    AUDIT COMMITTEE FINANCIAL EXPERT  Form 20-F.
 ITEM 16B 
    CODE OF ETHICS    www.petrochina.com.cn,
     113




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##### Table of Contents



ITEM 16C 
    PRINCIPAL ACCOUNTANT FEES AND SERVICES  Form 20-F.
      December 31,2008


2009RMB


RMB(In millions)Audit fees


95



80Audit-related fees






Tax fees






All other fees






Total


95



80       Audit
    Committee Pre-approved Policies and Procedures
    de minimis Rule 2-01 Regulation S-X.
 ITEM 16D 
    EXEMPTIONS FROM LISTING STANDARDS FOR AUDIT
    COMMITTEES  Rule 10A-3 Rule 10A-3.
 114




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##### Table of Contents



ITEM 16E 
    PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
    PURCHASERS   ITEM 16F 
    CHANGE IN REGISTRANTS CERTIFYING
    ACCOUNTANT   ITEM 16G 
    CORPORATE GOVERNANCE      Director
    Independence
      Nominating/Corporate
    Governance Committee
    Compensation
    Committee
     115




---



##### Table of Contents



Corporate
    Governance Guidelines
      
    director qualification standards and responsibilities;
    key board committee responsibilities;
    director compensation; and
    director orientation and continuing education.      Code of
    Business Conduct and Ethics
  Form 20-F
  Certification
    Requirements
   PART III ITEM 17 
    FINANCIAL STATEMENTS   116




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##### Table of Contents



ITEM 18 
    FINANCIAL STATEMENTS  page F-1
 ITEM 19 
    EXHIBITS      ExhibitNumber

Description of Exhibits1
.1

Articles of Association (as amended) (English
    translation)(5)1
.2

Articles of Association (as amended on May 15, 2008)
    (English
    translation)(5)4
.1

2010 Management Performance Contract (English Translation)4
.2

Risk Operation Service Business Assets Transfer Agreement, dated
    August 23, 2007, between CNPC and PetroChina (English
    Translation)(5)4
.3

Capital Injection Agreement Concerning CNPC Exploration and
    Development Company Limited, dated December 27, 2007, among
    CNODC, CNPC E&D and PetroChina (English
    Translation)(5)4
.4

Annual Crude Oil Mutual Supply Framework Agreement, dated
    December 30, 2009, between China Petroleum and Chemical
    Corporation and PetroChina (English translation)4
.5

Second Supplemental Agreement to Comprehensive products and
    Services Agreement, dated September 1, 2005, between CNPC
    and PetroChina (English
    translation)(2)4
.6

Supplementary Agreement to Comprehensive Products and Services
    Agreement, dated June 9, 2005, between CNPC and PetroChina
    (English
    Translation)(3)4
.7

Form of Non-competition Agreement between CNPC and PetroChina
    (together with English
    translation)(4)4
.8

Form of Comprehensive Products and Services Agreement between
    CNPC and PetroChina (together with English
    translation)(4)4
.9

Form of Land Use Rights Leasing Contract between CNPC and
    PetroChina (together with English
    translation)(4)4
.10

Form of Buildings Leasing Contract between CNPC and PetroChina
    (together with English
    translation)(4)4
.11

Form of Trademark Licensing Contract between CNPC and PetroChina
    (together with English
    translation)(4)4
.12

Form of Patent and Know-how Licensing Contract between CNPC and
    PetroChina (together with English
    translation)(4)4
.13

Form of Computer Software Licensing Contract between CNPC and
    PetroChina (together with English
    translation)(4)4
.14

Form of Contract for Transfer of Rights under Production Sharing
    Contracts between CNPC and PetroChina (together with English
    translation)(4)4
.15

Form of Guarantee of Debts Contract between CNPC and PetroChina
    (together with English
    translation)(4)4
.16

Form of Contract for the Supervision of Certain Sales
    Enterprises between CNPC and PetroChina (together with English
    translation)(4)4
.17

Form of Agreement for Transfer of Rights and Interests under the
    Crude Oil Premium and Discount Calculation Agreement between
    China Petrochemical Corporation, CNPC and PetroChina (together
    with English
    translation)(4)4
.18

Form of Agreement for the Transfer of Rights and Interests under
    the Retainer Contracts relating to Oil Exploration and
    Exploitation in Lengjiapu Area, Liaohe Oil Region and
    No. 9.1-9.5
    Areas, Karamay Oil Field (together with English
    translation)(4)4
.19

Inspection and Maintenance Business Equity and Assets Transfer
    Agreement, dated April 28, 2008, between CNPC and
    Petrochina (English
    translation)(6)4
.20

Assets Transfer Agreement, date June 10, 2008, between
    Petrochina and CNPC (English
    translation)(6) 117




---



##### Table of Contents



ExhibitNumber

Description of Exhibits4
.21

Agreement for the Sale and Purchase of Shares in Sun World
    Limited, dated August 27, 2008, among Petrochina, CNPC and
    China Petroleum Hong Kong (Holding) Limited (English
    translation)(6)4
.22

Form of Risk Operation Service Business Assets Transfer
    Agreements, dated August November 19, 2008, among six
    branch companies of Petrochina and six subordinate enterprises
    of CNPC (English
    translation)(6)4
.23

Equity Interests Transfer Agreement, dated May 15, 2009,
    between PetroChina Kunlun Gas Limited and China Petroleum
    Pipeline Bureau; Form of Equity Interests Transfer Agreements,
    dated May 15, 2009, between PetroChina Kunlun Gas Limited
    and China Huayou Group Corporation; Assets Transfer Agreement,
    dated May 15, 2009, between PetroChina Kunlun Gas Limited
    and China Petroleum Pipeline Bureau (English
    translation)(6)4
.24

Asset Transfer Agreement, dated June 18, 2009, between
    PetroChina West Pipeline Company and CNPC West Pipeline Company
    Limited (English translation)4
.25

Equity Transfer Agreement, dated August 28, 2009, among
    CNPC E&D, CNPC Central Asia and PetroChina (English
    translation)4
.26

Asset Transfer Agreement, dated August 28, 2009, between
    ten branch companies of PetroChina and ten subordinated entities
    of CNPC including CNPC Daqing Petrochemical Factory (English
    translation)4
.27

Contractual Rights Transfer Agreement, dated August 28,
    2009, between Beijing Amu Darya Company and CNPCI (English
    translation)4
.28

Equity Transfer Agreement, dated December 30, 2009, between
    PetroChina Kunlun Gas Limited and Daqing Petroleum
    Administrative Bureau (English translation)4
.29

Subscription Agreement, Dated March 25, 2010 among
    PetroChina, CNPC and CPF (English translation)8
.1

List of major subsidiaries11
.1

Code of Ethics for Senior
    Management(3)11
.2

Code of Ethics for
    Employees(3)12
.1

Certification of Chief Executive Officer required by
    Section 302 of the Sarbanes-Oxley Act of 200212
.2

Certification of Chief Financial Officer required by
    Section 302 of the Sarbanes-Oxley Act of 200213
.1

Certification of Chief Executive Officer required by
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 200213
.2

Certification of Chief Financial Officer required by
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 200215
.1

Reserve Report for the year ended on December 31, 2009
    prepared by DeGolyer and MacNaughton15
.2

Reserve Report for the year ended on December 31, 2009
    prepared by Gaffney, Cline & Associates (Consultants)
    Pte Ltd     (1)
    
    Incorporated by reference to our annual report on
    Form 20-F
    for the fiscal year ended December 31, 2006
    (File No. 1-15006)
    filed with the Commission.(2)
    
    Incorporated by reference to our annual report on
    Form 20-F
    for the fiscal year ended December 31, 2005
    (File No. 1-15006)
    filed with the Commission.(3)
    
    Incorporated by reference to our annual report on
    Form 20-F
    for the fiscal year ended December 31, 2004
    (File No. 1-15006)
    filed with the Commission.(4)
    
    Incorporated by reference to our Registration Statement on
    Form F-1
    (File
    No. 333-11566)
    filed with the Commission, as declared effective on
    March 29, 2000.(5)
    
    Incorporated by reference to our annual report on
    Form 20-F
    for the fiscal year ended December 31, 2007
    (File No. 1-15006)
    filed with the Commission.(6)
    
    Incorporated by reference to our annual report on
    Form 20-F
    for the fiscal year ended December 31, 2008
    (File No. 1-15006)
    filed with the Commission. 118




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##### Table of Contents



SIGNATURE
  Form 20-F
    
   Title:
    Secretary to Board of Directors   119




---



##### Table of Contents



INDEX OF
    CONSOLIDATED FINANCIAL STATEMENTS
  PagePetroChina Company Limited and its SubsidiariesConsolidated Financial StatementsReport of Independent Registered Public
    Accounting Firm


F-2Consolidated Statement of Comprehensive Income
    for each of the three years in the period ended
    December 31, 2009


F-3Consolidated Statement of Financial Position as
    of December 31, 2008 and 2009


F-4Consolidated Statement of Cash Flows for each of
    the three years in the period ended December 31, 2009


F-5Consolidated Statement of Changes in Equity for
    each of the three years in the period ended December 31,
    2009


F-7Notes to the Consolidated Financial Statements


F-8Supplementary information on Oil and Gas
    Producing Activities (unaudited)


F-49  F-1




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM    Internal Control  Integrated Framework
         F-2




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITEDCONSOLIDATED STATEMENT OF
    COMPREHENSIVE INCOMEFor the Year Ended December 31, 2009,
    2008 and 2007
    (Amounts in millions)
  Notes

2009


2008


2007RMB


RMB


RMBTURNOVER

6


1,019,275



1,072,604



837,542OPERATING EXPENSESPurchases, services and other




(492,472
)


(562,851
)


(369,786
)Employee compensation costs

8


(65,977
)


(62,167
)


(50,940
)Exploration expenses, including exploratory dry holes




(19,398
)


(21,879
)


(20,956
)Depreciation, depletion and amortisation




(92,259
)


(94,759
)


(67,423
)Selling, general and administrative expenses




(65,423
)


(59,617
)


(52,389
)Taxes other than income taxes

9


(135,465
)


(124,132
)


(73,806
)Other (expenses)/income, net




(4,837
)


12,372



(1,225
)TOTAL OPERATING EXPENSES




(875,831
)


(913,033
)


(636,525
)PROFIT FROM OPERATIONS




143,444



159,571



201,017FINANCE COSTSExchange gain




552



1,774



1,808Exchange loss




(1,335
)


(2,855
)


(2,559
)Interest income




1,459



2,277



2,101Interest expense

10


(5,272
)


(3,044
)


(3,673
)TOTAL NET FINANCE COSTS




(4,596
)


(1,848
)


(2,323
)SHARE OF PROFIT OF ASSOCIATES AND JOINTLY CONTROLLED
    ENTITIES

17


1,184



4,290



6,445PROFIT BEFORE INCOME TAX EXPENSE

7


140,032



162,013



205,139INCOME TAX EXPENSE

12


(33,473
)


(35,211
)


(49,802
)PROFIT FOR THE YEAR




106,559



126,802



155,337OTHER COMPREHENSIVE INCOME:Currency translation differences




(3,500
)


(2,676
)


(1,852
)Fair value gain/(loss) from
    available-for-sale
    financial assets




191



(340
)


395Income tax relating to components of other comprehensive
    income/(loss)




(38
)


67



(87
)OTHER COMPREHENSIVE LOSS, NET OF TAX




(3,347
)


(2,949
)


(1,544
)TOTAL COMPREHENSIVE INCOME FOR THE YEAR




103,212



123,853



153,793PROFIT FOR THE YEAR ATTRIBUTABLE TO:Owners of the Company




103,387



114,453



146,796Non-controlling interest




3,172



12,349



8,541106,559



126,802



155,337TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO:Owners of the Company




102,067



113,044



146,144Non-controlling interest




1,145



10,809



7,649103,212



123,853



153,793BASIC AND DILUTED EARNINGS PER SHARE FOR PROFIT ATTRIBUTABLE
    TO OWNERS OF THE COMPANY (RMB)

14


0.56



0.63



0.82    F-3




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##### Table of Contents



PETROCHINA
    COMPANY LIMITEDCONSOLIDATED STATEMENT OF
    FINANCIAL POSITIONAs of December 31, 2009 and 2008
    (Amounts in millions)
  Notes


2009


2008RMB


RMBNON-CURRENT ASSETSProperty, plant and equipment


16



1,075, 467



900,424Investments in associates and jointly controlled entities


17



28,223



28,850Available-for-sale
    financial assets


18



2,343



2,034Advance operating lease payments


20



30,236



26,280Intangible and other assets


21



18,017



10,694Deferred tax assets


31



289



497Time deposits with maturities over one year






1,330



2,510TOTAL NON-CURRENT ASSETS






1,155,905



971,289CURRENT ASSETSInventories


22



114,781



90,685Accounts receivable


23



28,785



16,810Prepaid expenses and other current assets


24



59,595



69,557Notes receivable


25



4,268



4,319Time deposits with maturities over three months but within one
    year






29



10,425Cash and cash equivalents


26



86,925



33,150TOTAL CURRENT ASSETS






294,383



224,946CURRENT LIABILITIESAccounts payable and accrued liabilities


27



204,739



156,780Income taxes payable






9,721



1,271Other taxes payable






25,242



13,930Short-term borrowings


28



148,851



93,670TOTAL CURRENT LIABILITIES






388,553



265,651NET CURRENT LIABILITIES






(94,170
)


(40,705
)TOTAL ASSETS LESS CURRENT LIABILITIES






1,061,735



930,584EQUITYEQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY:Share capital


29



183,021



183,021Retained earnings






424,067



378,473Reserves


30



240,135



229,416TOTAL EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY






847,223



790,910NON-CONTROLLING INTEREST






60,478



56,930TOTAL EQUITY






907,701



847,840NON-CURRENT LIABILITIESLong-term borrowings


28



85,471



32,852Asset retirement obligations


32



44,747



36,262Deferred tax liabilities


31



21,449



12,466Other long-term obligations






2,367



1,164TOTAL NON-CURRENT LIABILITIES






154,034



82,744TOTAL EQUITY AND NON-CURRENT LIABILITIES






1,061,735



930,584     Chairman

Vice Chairman and President

Chief Financial OfficerJiang Jiemin

Zhou Jiping

Zhou Mingchun  F-4




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##### Table of Contents



PETROCHINA
    COMPANY LIMITEDCONSOLIDATED STATEMENT OF CASH
    FLOWSFor the Year Ended December 31, 2009,
    2008 and 2007
    (Amounts in millions)
  2009


2008


2007RMB


RMB


RMBCASH FLOWS FROM OPERATING ACTIVITIESProfit for the year


106,559



126,802



155,337Adjustments for:Income tax expense


33,473



35,211



49,802Depreciation, depletion and amortisation


92,259



94,759



67,423Capitalised exploratory costs charged to expense


10,019



10,341



9,161Share of profit of associates and jointly controlled entities


(1,184
)


(4,290
)


(6,445
)(Reversal) of provision/provision for impairment of receivables,
    net


(123
)


4



(2,318
)Write down in inventories, net


354



8,593



55Impairment of
    available-for-sale
    financial assets, net


2



45



Impairment of investments in associates and jointly controlled
    entities


8



29



5Loss on disposal of property, plant and equipment


1,642



2,602



1,808Loss/(gain) on disposal of intangible and other assets


10



19



(2
)(Gain)/loss on disposal of investments in associates and jointly
    controlled entities


(33
)


3



(320
)Gain on disposal of
    available-for-sale
    financial assets


(4
)


(5
)


(142
)Gain on disposal of subsidiaries


(22
)


(259
)


Dividend income


(177
)


(252
)


(126
)Interest income


(1,459
)


(2,277
)


(2,101
)Interest expense


5,272



3,044



3,673Advance payments on long-term operating leases


(6,045
)


(4,675
)


(4,803
)Changes in working capital:Accounts receivable and prepaid expenses and other current assets


16,240



(26,815
)


(16,054
)Inventories


(20,044
)


(10,775
)


(12,041
)Accounts payable and accrued liabilities


41,637



(5,715
)


19,799CASH FLOWS GENERATED FROM OPERATIONS


278,384



226,389



262,711Income taxes paid


(16,412
)


(53,924
)


(55,048
)NET CASH FLOWS FROM OPERATING ACTIVITIES


261,972



172,465



207,663    F-5




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##### Table of Contents



PETROCHINA
    COMPANY LIMITED
    CONSOLIDATED STATEMENT OF CASH FLOWS  (Continued)
    For the Year Ended December 31, 2009, 2008 and 2007
    (Amounts in millions)
  2009


2008


2007RMB


RMB


RMBCASH FLOWS FROM INVESTING ACTIVITIESCapital expenditures


(257,562
)


(215,610
)


(173,528
)Acquisition of investments in associates and jointly controlled
    entities


(1,487
)


(3,641
)


(1,903
)Acquisition of
    available-for-sale
    financial assets


(111
)


(23
)


(328
)Consolidation of PetroKazakhstan Inc.










1,542Acquisition of intangible assets and other non-current assets


(3,505
)


(3,909
)


(3,378
)Purchase of non-controlling interest


(533
)


(177
)


(178
)Acquisition of subsidiaries


(16,451
)


(6,693
)


Repayment of capital by associates and jointly controlled
    entities










6,618Proceeds from disposal of property, plant and equipment


4,053



436



1,028Proceeds from disposal of investments in associates and jointly
    controlled entities


139



67



1,033Proceeds from disposal of subsidiaries


60



535



Proceeds from disposal of
    available-for-sale
    financial assets


136



52



276Proceeds from disposal of intangible and other non-current assets


26



37



Interest received


1,425



2,365



2,074Dividends received


783



4,095



1,113Decrease in time deposits with maturities over three months


11,574



10,669



(18,025
)NET CASH FLOWS USED FOR INVESTING ACTIVITIES


(261,453
)


(211,797
)


(183,656
)CASH FLOWS FROM FINANCING ACTIVITIESRepayments of short-term borrowings


(113,212
)


(84,471
)


(33,556
)Repayments of long-term borrowings


(7,947
)


(14,196
)


(24,218
)Interest paid


(5,238
)


(4,065
)


(4,232
)Dividends paid to non-controlling interest


(2,425
)


(2,805
)


(4,832
)Dividends paid to owners of the Company


(50,092
)


(52,835
)


(64,517
)Dividends paid to owners from business combinations
    pre-acquisition






(801
)


(9
)Issuance of A shares










66,243Increase in short-term borrowings


157,576



153,444



37,236Increase in long-term borrowings


67,880



4,472



20,650Capital contribution from non-controlling interest


7,098



8,788



1,364Capital reduction of subsidiaries


(671
)


(3,754
)


Increase in other long-term obligations


108







33NET CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES


53,077



3,777



(5,838
)TRANSLATION OF FOREIGN CURRENCY


179



(112
)


(221
)Increase/(decrease) in cash and cash equivalents


53,775



(35,667
)


17,948Cash and cash equivalents at beginning of the year


33,150



68,817



50,869Cash and cash equivalents at end of the year


86,925



33,150



68,817    F-6




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##### Table of Contents



PETROCHINA
    COMPANY LIMITEDCONSOLIDATED STATEMENT OF CHANGES
    IN EQUITYFor the Year Ended December 31, 2009,
    2008 and 2007
    (Amounts in millions)
  Non-Controlling


TotalAttributable to Owners of the Company


Interest


EquityShare


RetainedCapital


Earnings


Reserves


SubtotalRMB


RMB


RMB


RMB


RMB


RMBBalance at December 31, 2006


179,021



267,850



143,552



590,423



31,749



622,172Business combinations under common control






(183
)


174



(9
)


456



447Balance at January 1, 2007


179,021



267,667



143,726



590,414



32,205



622,619Total comprehensive income/(loss) for the year ended
    December 31, 2007






146,796



(652
)


146,144



7,649



153,793Special Reserve-Safety Fund Reserve






(3,536
)


3,536











Transfer to reserves






(12,768
)


12,768











Final dividend for 2006






(27,694
)






(27,694
)






(27,694
)Interim dividend for 2007 (Note 15)






(36,823
)






(36,823
)






(36,823
)Dividends to non-controlling interest


















(4,823
)


(4,823
)Purchase of non-controlling interest in subsidiaries










(113
)


(113
)


(65
)


(178
)Consolidation of PetroKazakhstan Inc.


















8,101



8,101Issuance of A shares


4,000







62,243



66,243







66,243Capital contribution from non-controlling interest


















1,364



1,364Dividends to owners from business combinations
    pre-acquisition






(2
)






(2
)


(15
)


(17
)Other










77



77



57



134Balance at December 31, 2007


183,021



333,640



221,585



738,246



44,473



782,719Total comprehensive income/(loss) for the year ended
    December 31, 2008






114,453



(1,409
)


113,044



10,809



123,853Special Reserve-Safety Fund Reserve






(3,214
)


3,214











Transfer to reserves






(12,770
)


12,770











Final dividends for 2007 (Note 15)






(28,708
)






(28,708
)






(28,708
)Interim dividends for 2008 (Note 15)






(24,127
)






(24,127
)






(24,127
)Dividends to non-controlling interest


















(2,842
)


(2,842
)Purchase of non-controlling interest in subsidiaries










(17
)


(17
)


(160
)


(177
)Capital contribution from non-controlling interest


















8,788



8,788Capital reduction of subsidiaries










(61
)


(61
)


(3,693
)


(3,754
)Dividends to owners from business combinations
    pre-acquisition






(801
)






(801
)






(801
)Disposal of subsidiaries


















(429
)


(429
)Acquisition of a subsidiary










(6,693
)


(6,693
)






(6,693
)Other










27



27



(16
)


11Balance at December 31, 2008


183,021



378,473



229,416



790,910



56,930



847,840Total comprehensive income/(loss) for the year ended
    December 31, 2009






103,387



(1,320
)


102,067



1,145



103,212Special Reserve-Safety Fund Reserve






2,280



1,325



3,605



3



3,608Transfer to reserves






(9,981
)


9,981











Final dividends for 2008 (Note 15)






(27,367
)






(27,367
)






(27,367
)Interim dividends for 2009 (Note 15)






(22,725
)






(22,725
)






(22,725
)Dividends to non-controlling interest


















(2,358
)


(2,358
)Acquisition of subsidiaries










(248
)


(248
)


590



342Purchase of non-controlling interest in subsidiaries










(179
)


(179
)


(354
)


(533
)Capital contribution from non-controlling interest










1,158



1,158



5,940



7,098Capital reduction of a subsidiary


















(1,354
)


(1,354
)Other










2



2



(64
)


(62
)Balance at December 31, 2009


183,021



424,067



240,135



847,223



60,478



907,701    F-7




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO
    THE FINANCIAL STATEMENTS
 (Amounts in millions unless otherwise stated)
  1  ORGANISATION
    AND PRINCIPAL ACTIVITIES
      2  BASIS
    OF PREPARATION
      3  SUMMARY
    OF PRINCIPAL ACCOUNTING POLICIES
  (a)  Basis
    of consolidation
       F-8




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
        (b)  Investments
    in associates
      (c)  Investments
    in jointly controlled entities
      (d)  Transactions
    with non-controlling interest
    (e)  Foreign
    currencies
   F-9




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
      (f)  Property,
    plant and equipment
              Buildings


8-40 yearsEquipment and Machinery


4-30 yearsMotor vehicles


4-14 yearsOther


5-12 years        F-10




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
        (g)  Oil
    and gas properties
  12-month first-day-of-the-month
        (h)  Intangible
    assets
   F-11




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
    (i)  Financial
    assets
  held-to-maturity available-for-sale available-for-sale available-for-sale
  (i)  Loans
    and receivables
    (ii)  Available-for-sale
    financial assets
  Available-for-sale available-for-sale
  available-for-sale Available-for-sale Available-for-sale Available-for-sale Available-for-sale available-for-sale available-for-sale
  (j)  Leases
     F-12




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  (k)  Inventories
    (l)  Accounts
    receivable
    (m)  Cash
    and cash equivalents
    (n)  Accounts
    payable
    (o)  Borrowings
        (p)  Taxation
   F-13




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
      (q)  Revenue
    recognition
    take-or-pay take-or-pay take-or-pay
  (r)  Provisions
      (s)  Research
    and development
    (t)  Retirement
    benefit plans
   F-14




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
    (u)  New
    accounting developments
  (i)  New
    and amended standards adopted by the Group
                     F-15




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  value-in-use
    (ii)  Standards,
    amendments and interpretations to existing standards that are
    not yet effective and have not been early adopted by the Group
    acquisition-by-acquisition
    held-for-sale  held-for-sale
     F-16




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
    4  FINANCIAL
    RISK AND CAPITAL MANAGEMENT
  4.1  Financial
    risk factors
    (a)  Market
    risk
  (i)  Foreign
    exchange risk
    (ii)  Interest
    rate risk
    (iii)  Price
    risk
    (b)  Credit
    risk
       F-17




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
      (c)  Liquidity
    risk
        4.2  Capital
    management
      4.3  Fair
    value estimation
      5  CRITICAL
    ACCOUNTING ESTIMATES AND JUDGEMENTS
      (a)  Estimation
    of oil and natural gas reserves
  unit-of-production
 F-18




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
    (b)  Estimation
    of impairment of property, plant and equipment
    (c)  Estimation
    of asset retirement obligations
    6  TURNOVER
   F-19




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  7  PROFIT
    BEFORE INCOME TAX EXPENSE
  2009

2008

2007RMB

RMB

RMBItems credited and debited in arriving at the profit before
    income tax expense include:CreditedDividend income from
    available-for-sale
    financial assets


177



252



126Reversal of provision for impairment of receivables


240



184



2,473Reversal of write down in inventories


23



15



98Government grants(i)


1,097



16,914



1,197ChargedAmortisation on intangible and other assets


2,153



1,888



1,507Auditors remuneration


80



95



119Cost of inventories recognised as expense


613,702



662,758



459,281Provision for impairment of receivables


117



188



155Loss on disposal of property, plant and equipment


1,642



2,602



1,808Operating lease expenses


7,367



6,819



7,448Research and development expenses


9,887



7,760



5,315Write down in inventories


377



8,608



153     (i)
    
    Government grants during the year 2008 primarily comprise
    financial support measures provided by the PRC government to
    ensure supply of crude oil and refined products in the domestic
    market implemented from 2008.  8  EMPLOYEE
    COMPENSATION COSTS
  2009

2008

2007RMB

RMB

RMBWages, salaries and allowances


44,202



39,008



32,856Social security costs


21,775



23,159



18,08465,977



62,167



50,940     9  TAXES
    OTHER THAN INCOME TAXES
   F-20




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  10  INTEREST
    EXPENSE
  2009

2008

2007RMB

RMB

RMBInterest onBank loans wholly repayable within five years


1,339



2,065



2,058 not wholly repayable within five years


90



22



181Other loans wholly repayable within five years


4,624



1,365



1,643 not wholly repayable within five years


477



598



327Accretion expense (Note 32)


1,943



1,746



1,202Less: Amounts capitalised


(3,201
)


(2,752
)


(1,738
)5,272



3,044



3,673     11  EMOLUMENTS
    OF DIRECTORS AND SUPERVISORS
    2009

2008

2007Fee for

Salaries,Directors

Allowances

Contributionand

and Other

to RetirementName

Supervisors

Benefits

Benefit Scheme

Total

Total

TotalRMB000

RMB000

RMB000

RMB000

RMB000

RMB000Chairman:Mr. Chen Geng(i)






















598Mr. Jiang Jiemin






















916



















1,514Vice Chairman:Mr. Zhou Jiping






737



37



774



515



Executive directors:Mr. Duan Wende(iii)


















366



824Mr. Liao Yongyuan






710



37



747



869







710



37



747



1,235



824 F-21




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  2009

2008

2007Fee for

Salaries,Directors

Allowances

Contributionand

and Other

to RetirementName

Supervisors

Benefits

Benefit Scheme

Total

Total

TotalRMB000

RMB000

RMB000

RMB000

RMB000

RMB000Non-executive directors:Mr. Wang Yilin






















Mr. Zeng Yukang






















Mr. Wang Fucheng






















Mr. Wang Guoliang






















Mr. Li Xinhua






















Mr. Jiang Fan






494



25



519



569



499Mr. Chee-chen Tung


260











260



249



264Mr. Liu Hongru


339











339



343



349Mr. Li Yongwu(ii)


344











344



197



Mr. Cui Junhui


348











348



331



Mr. Franco Bernabè


246











246



243



2571,537



494



25



2,056



1,932



1,369Supervisors:Mr. Chen Ming






















Mr. Wen Qingshan






















Mr. Sun Xianfeng






















Mr. Yu Yibo






















Mr. Xu Fengli(i)






















264Mr. Wang Yawei






















Mr. Qin Gang






507



34



541



521



469Ms. Wang Shali






















Mr. Li Yongwu(ii)


















110



315Mr. Zhang Jinzhu(iii)


















206



333Mr. Wu Zhipan(iv)


107











107



234



319Mr. Li Yuan


217











217



124



Mr. Wang Daocheng(iv)


117











117







441



507



34



982



1,195



1,7001,978



2,448



133



4,559



4,877



5,407     (i)
    
    No longer a director or supervisor since May 16, 2007.(ii)
    
    Elected as an independent non-executive director in May 16,
    2008 and no longer a supervisor since then.(iii)
    
    No longer an executive director or a supervisor since
    May 16, 2008.(iv)
    
    Mr. Wu Zhipan no longer as a supervisor since May 12,
    2009 and Mr. Wang Daocheng was elected as a supervisor
    since then.(v)
    
    Emoluments exclude the one-off payments by the Company to some
    of the independent non-executive directors of approximately
    RMB7.30 million in 2009.    2009

2008

2007Number

Number

NumberRMB Nil  RMB 1 million


24



25



20  F-22




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
        12  INCOME
    TAX EXPENSE
  2009

2008

2007RMB

RMB

RMBCurrent taxes


24,862



43,423



48,995Deferred taxes (Note 31)


8,611



(8,212
)


80733,473



35,211



49,802       2009

2008

2007RMB

RMB

RMBProfit before income tax expense


140,032



162,013



205,139Tax calculated at a tax rate of 25% (2007: 33%)


35,008



40,503



67,696Prior year tax return adjustment


(2,216
)


25



451Effect of income taxes from international operations in excess
    of taxes at the PRC statutory tax rate


1,820



6,876



633Effect of preferential tax rate


(5,502
)


(10,907
)


(17,043
)Effect of change in statutory income tax rates on deferred taxes


(184
)


(3,134
)


(3,788
)Tax effect of income not subject to tax


(1,140
)


(1,357
)


(2,840
)Tax effect of taxable items deductible for tax purposes










(2,365
)Tax effect of expenses not deductible for tax purposes


5,687



3,205



4,140Tax effect of unused tax losses which had expired










2,918Taxation


33,473



35,211



49,802   13  PROFIT
    ATTRIBUTABLE TO OWNERS OF THE COMPANY
   F-23




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  14  BASIC
    AND DILUTED EARNINGS PER SHARE
        15  DIVIDENDS
  2009

2008

2007RMB

RMB

RMBInterim dividends attributable to owners of the Company for 2009
    (note a)


22,725







Proposed final dividends attributable to owners of the Company
    for 2009 (note b)


23,799







Interim dividends attributable to owners of the Company for 2008
    (note c)






24,127



Final dividends attributable to owners of the Company for 2008
    (note d)






27,367



Interim dividends attributable to owners of the Company for 2007
    (note e)










36,823Final dividends attributable to owners of the Company for 2007
    (note f)










28,70846,524



51,494



65,531     (a)
    
    Interim dividends attributable to owners of the Company in
    respect of 2009 of RMB 0.12417 yuan per share amounting to a
    total of RMB 22,725 and were paid on October 16, 2009.(b)
    
    At the meeting on March 25, 2010, the Board of Directors
    proposed final dividends attributable to owners of the Company
    in respect of 2009 of RMB 0.13003 yuan per share amounting to a
    total of RMB 23,799. These consolidated financial statements do
    not reflect this dividend payable as the final dividends were
    proposed after the reporting period and will be accounted for in
    equity as an appropriation of retained earnings in the year
    ending December 31, 2010 when approved at the forthcoming
    Annual General Meeting.(c)
    
    Interim dividends attributable to owners of the Company in
    respect of 2008 of RMB 0.13183 yuan per share amounting to a
    total of RMB 24,127 and were paid on October 16, 2008.(d)
    
    Final dividends attributable to owners of the Company in respect
    of 2008 of RMB 0.14953 yuan per share amounting to a total of
    RMB 27,367 were approved by the shareholders in the Annual
    General Meeting on May 12, 2009 and were paid on
    June 19, 2009.(e)
    
    Interim dividends attributable to owners of the Company in
    respect of 2007 of RMB 0.205690 yuan per share amounting to a
    total of RMB 36,823 and were paid on September 28, 2007.  (f)
    
    Final dividends attributable to owners of the Company in respect
    of 2007 of RMB 0.156859 yuan per share amounting to a total of
    RMB 28,708 and were paid on June 13, 2008. F-24




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  16  PROPERTY,
    PLANT AND EQUIPMENT
  EquipmentOil and Gas

and

Motor



ConstructionYear Ended December 31, 2009

Buildings

Property

Machinery

Vehicles

Other

in Progress

TotalRMB

RMB

RMB

RMB

RMB

RMB

RMBCost or valuationAt beginning of the year


99,680



790,354



366,953



17,537



9,924



172,353



1,456,801Additions


4,516



11,141



27,315



3,277



2,880



236,285



285,414Transfers


9,746



97,136



62,540







1,497



(170,919
)


Disposals or write offs


(2,167
)


(5,838
)


(3,842
)


(503
)


(3,107
)


(11,614
)


(27,521
)Currency translation differences


(415
)


(3,944
)


(402
)


(127
)


(143
)


(626
)


(5,657
)At end of the year


110,910



888,849



452,564



20,184



11,051



225,479



1,709,037Accumulated depreciation
    and impairmentAt beginning of the year


(27,710
)


(317,301
)


(196,842
)


(8,536
)


(5,723
)


(265
)


(556,377
)Charge for the year


(5,614
)


(57,088
)


(24,988
)


(1,657
)


(1,012
)


(11
)


(90,370
)Disposals or write offs or transfers


1,087



3,455



3,363



378



2,873







11,156Currency translation differences


124



1,497



179



83



137



1



2,021At end of the year


(32,113
)


(369,437
)


(218,288
)


(9,732
)


(3,725
)


(275
)


(633,570
)Net book valueAt end of the year


78,797



519,412



234,276



10,452



7,326



225,204



1,075,467   F-25




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  EquipmentOil and Gas

and

Motor



ConstructionYear Ended December 31, 2008

Buildings

Property

Machinery

Vehicles

Other

in Progress

TotalRMB

RMB

RMB

RMB

RMB

RMB

RMBCost or valuationAt beginning of the year


90,951



676,011



334,948



15,284



9,034



113,283



1,239,511Additions


1,006



14,382



3,720



2,816



288



220,202



242,414Transfers


10,287



106,930



32,296







930



(150,443
)


Disposals or write offs


(2,317
)


(3,946
)


(3,631
)


(496
)


(222
)


(10,341
)


(20,953
)Currency translation differences


(247
)


(3,023
)


(380
)


(67
)


(106
)


(348
)


(4,171
)At end of the year


99,680



790,354



366,953



17,537



9,924



172,353



1,456,801Accumulated depreciation and impairmentAt beginning of the year


(22,907
)


(269,289
)


(167,074
)


(7,446
)


(5,050
)


(285
)


(472,051
)Charge for the year


(5,869
)


(50,848
)


(31,916
)


(1,466
)


(946
)


(1
)


(91,046
)Disposals or write offs or transfers


1,008



1,868



2,039



340



214



20



5,489Currency translation differences


58



968



109



36



59



1



1,231At end of the year


(27,710
)


(317,301
)


(196,842
)


(8,536
)


(5,723
)


(265
)


(556,377
)Net book valueAt end of the year


71,970



473,053



170,111



9,001



4,201



172,088



900,424        F-26




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
    2009

2008

2007RMB

RMB

RMBAt beginning of the year


15,853



11,975



9,005Additions to capitalised exploratory well costs pending the
    determination of proved reserves


22,891



26,503



23,067Reclassified to wells, facilities, and equipment based on the
    determination of proved reserves


(11,504
)


(12,284
)


(10,936
)Capitalised exploratory well costs charged to expense


(10,019
)


(10,341
)


(9,161
)At end of the year


17,221



15,853



11,975     December 31,

December 31,2009

2008RMB

RMBOne year or less


15,560



14,318Over one year


1,661



1,535Balance at December 31


17,221



15,853     17  INVESTMENTS
    IN ASSOCIATES AND JOINTLY CONTROLLED ENTITIES
    Country of









Interest

Type ofName

Incorporation

Assets

Liabilities

Revenues

Profit/(loss)

Held %

ShareRMB

RMB

RMB

RMBAs of or for the year ended December 31, 2009:Dalian West Pacific 
    Petrochemical Co., Ltd.


PRC



10,168



12,228



28,205



1,076



28.44



ordinaryChina Marine Bunker (PetroChina) Co., Ltd.


PRC



6,546



3,501



27,510



358



50.00



ordinaryAs of or for the year ended December 31, 2008:Dalian West Pacific 
    Petrochemical Co., Ltd.


PRC



10,433



13,182



41,643



(5,660
)


28.44



ordinaryChina Marine Bunker (PetroChina) Co., Ltd.


PRC



6,619



3,972



43,037



392



50.00



ordinary    F-27




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
    18  AVAILABLE-FOR-SALE
    FINANCIAL ASSETS
  December 31,

December 31,2009

2008RMB

RMBAvailable-for-sale
    financial assets


2,799



2,509Less: Impairment losses


(456
)


(475
)2,343



2,034   Available-for-sale
  available-for-sale
  19  SUBSIDIARIES
    AttributableCountry of

Paid-Up

Type of

EquityCompany Name

Incorporation

Capital

Legal Entity

Interest %

Principal Activities(RMB)Daqing Oilfield Company Limited


PRC



47,500


Limited liability
    company


100.00


Exploration, production and sale of crude oil and natural gasCNPC Exploration and Development Company Limited


PRC



16,100


Limited liability
    company


50.00


Exploration, production and sale of crude oil and natural gas in
    and outside the PRCPetroKazakhstan Inc.


Canada



US Dollar 665


Joint stock company
    with limited liability


67.00


Exploration, production and sale of crude oil and natural gas
    outside the PRCPetroChina Hong Kong Limited


Hong Kong



HK Dollar 7,592


Limited liability
    company


100.00


Investment holding. The  principal activities of its
    subsidiaries, associates and jointly controlled entities are the
    exploration and production of crude oil and natural gas in and
    outside the PRC    F-28




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  20  ADVANCE
    OPERATING LEASE PAYMENTS
  December 31,

December 31,2009

2008RMB

RMBLand use rights


19,901



16,954Advance lease payments


10,335



9,32630,236



26,280   sub-leased
  21  INTANGIBLE
    AND OTHER ASSETS
  December 31, 2009

December 31, 2008Accumulated





AccumulatedCost

amortisation

Net

Cost

amortisation

NetRMB

RMB

RMB

RMB

RMB

RMBPatents


3,076



(1,939
)


1,137



3,071



(1,729
)


1,342Technical know-how


1,654



(242
)


1,412



372



(174
)


198Goodwill(i)


2,818







2,818



148







148Other


11,025



(2,992
)


8,033



7,098



(2,109
)


4,989Intangible assets


18,573



(5,173
)


13,400



10,689



(4,012
)


6,677Other assets










4,617











4,01718,017











10,694     (i)
    
    During the current year, the Group through PetroChina
    International (Singapore) Pte. Ltd. (an indirectly wholly owned
    subsidiary of the Company), acquired 100% of the share capital
    in Singapore Petroleum Company Limited for cash consideration of
    Singapore Dollars S$3,239 (approximately RMB 15,296). At the
    date of acquisition, the fair value of the net assets in
    Singapore Petroleum Company Limited is S$2,668 (approximately
    RMB 12,597) and consequently, goodwill of S$571 (approximately
    RMB 2,699) was recognised.   F-29




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  22  INVENTORIES
  December 31, 2009

December 31, 2008RMB

RMBCrude oil and other raw materials


30,928



31,319Work in progress


7,006



3,472Finished goods


77,685



65,074Spare parts and consumables


28



31115,647



99,896Less: Write down in inventories


(866
)


(9,211
)114,781



90,685     23  ACCOUNTS
    RECEIVABLE
  December 31,

December 31,2009

2008RMB

RMBAccounts receivable


30,909



19,233Less: Provision for impairment of receivables


(2,124
)


(2,423
)28,785



16,810     December 31,

December 31,2009

2008RMB

RMBWithin 1 year


28,579



16,563Between 1 to 2 years


112



156Between 2 to 3 years


84



25Over 3 years


2,134



2,48930,909



19,233       2009

2008RMB

RMBAt beginning of the year


2,423



2,880Provision for impairment of accounts receivable


38



36Receivables written off as uncollectible


(232
)


(388
)Reversal of provision for impairment of accounts receivable


(105
)


(105
)At end of the year


2,124



2,423  F-30




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  24  PREPAID
    EXPENSES AND OTHER CURRENT ASSETS
  December 31,

December 31,2009

2008RMB

RMBOther receivables


8,528



10,122Advances to suppliers


36,009



37,20944,537



47,331Less: Provision for impairment


(3,741
)


(3,943
)40,796



43,388Prepaid income taxes






Value-added tax recoverable


15,663



25,677Prepaid expenses


421



275Other current assets


2,715



21759,595



69,557     25  NOTES RECEIVABLE
    26  CASH
    AND CASH EQUIVALENTS
    27  ACCOUNTS
    PAYABLE AND ACCRUED LIABILITIES
  December 31,


December 31,2009


2008RMB


RMBTrade payables


62,840



38,795Advances from customers


21,193



13,008Salaries and welfare payable


5,105



6,377Accrued expenses


31



20Dividends payable by subsidiaries to non-controlling shareholders


105



154Interest payable


1,448



156Construction fee and equipment cost payables


93,920



79,491Other payables


20,097



18,779204,739



156,780    F-31




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
    December 31,


December 31,2009


2008RMB


RMBWithin 1 year


60,420



36,892Between 1 to 2 years


1,404



1,054Between 2 to 3 years


505



306Over 3 years


511



54362,840



38,795   28  BORROWINGS
  (a)  Short-term
    borrowings
  December 31,


December 31,2009


2008RMB


RMBBank loans secured


1,876



1,841 unsecured


18,377



25,111Loans from CNPC and a fellow CNPC subsidiary


54,369



60,819Short-term financing bills


60,000



Other






1134,622



87,772Current portion of long-term borrowings


14,229



5,898148,851



93,670   (b)  Long-term
    borrowings
  December 31,

December 31,Interest rates and final maturities

2009

2008RMB

RMBRenminbi  denominated borrowings:Bank loans for the development of oil fields and construction of
    refining plants

Floating interest rate at 5.35% per annum as of December 31,
    2009, with maturities through 2010


100



200Bank loans for working capital

Majority floating interest rates ranging from 4.86%  to 6.23%
    per annum as of December 31, 2009, with maturities through 2019


7,013



6,409 F-32




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  December 31,

December 31,Interest rates and final maturities

2009

2008RMB

RMBLoans from CNPC and a fellow CNPC subsidiary for the development
    of oil fields and construction of refining plants

Majority floating interest rates ranging from 2.48% to 5.04% per
    annum as of December 31, 2009, with maturities through 2032


16,262



16,181Working capital loans from a fellow CNPC subsidiary

Fixed interest rates ranging from 4.32% to 4.90% per annum as of
    December 31, 2009, with maturities through 2012


760



456Working capital loans

Majority fixed interest rates ranging from 2.55% to 6.32% per
    annum as of December 31, 2009, with no fixed repayment terms


44



5Corporate debenture for the development of oil and gas properties

Fixed interest rates ranging from 3.76% to 4.11% per annum as of
    December 31, 2009, with maturities through 2013


3,500



3,500Medium-term notes for the development of oil and gas properties

Fixed interest rates ranging from 2.28% to 3.35% per annum as of
    December 31, 2009, with maturities through 2014


45,000



US Dollar  denominated borrowings:Bank loans for the development of oil fields and construction of
    refining plants

Fixed interest rates ranging from zero to 1.50% per annum as of
    December 31, 2009, with maturities through 2038


240



278Bank loans for the development of oil fields and construction of
    refining plants

Floating interest rates ranging from LIBOR plus 0.50% to LIBOR
    plus 3.00% per annum as of December 31, 2009, with maturities
    through 2014


4,577



3,825Bank loans for working capital

Floating interest rates ranging from LIBOR plus 0.30% to LIBOR
    plus 2.00% per annum as of December 31, 2009, with maturities
    through 2014


10,632



2,392 F-33




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  December 31,

December 31,Interest rates and final maturities

2009

2008RMB

RMBLoans from a fellow CNPC subsidiary for the development of oil
    fields and construction of refining plants

Floating interest rates ranging from LIBOR plus 0.30% to 0.40%
    per annum as of December 31, 2009, with maturities through 2020


2,688



2,691Loans from fellow CNPC subsidiaries for working capital

Majority floating interest rate at LIBOR plus 1.00% per annum as
    of December 31, 2009, with maturities through 2015


7,674



851Loans for the development of oil fields and construction of
    refining plants

Fixed interest rate at  1.55% per annum as of December 31, 2009,
    with maturities through 2022


325



352Loans for working capital

Floating interest rate at 5.00% per annum as of December 31,
    2009, with no fixed repayment terms


47



569Corporate debenture for the development of oil fields and
    construction of refining plants

Fixed interest rate at 3.00% per annum as of December 31, 2009,
    with maturities through 2019


295



301Corporate debenture for the development of oil and gas properties

Fixed interest rate at 9.50% per annum as of December 31, 2009,
    with maturities through 2011


341



513Japanese Yen  denominated borrowings:Bank loans for the development of oil fields and construction of
    refining plants

Fixed interest rate at 2.42% per annum as of December 31, 2009,
    with maturities through 2010


10



20Euro  denominated borrowings:Bank loans for the development of oil fields and construction of
    refining plants

Fixed interest rates ranging from 2.00% to 2.30% per annum as of
    December 31, 2009, with maturities through 2023


192



207Total long-term borrowings


99,700



38,750Less: Current portion of long-term borrowings


(14,229
)


(5,898
)85,471



32,852    F-34




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##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
        December 31,


December 31,2009


2008RMB


RMBTotal borrowings: interest free


51



53 at fixed rates


163,155



85,170 at floating rates


71,116



41,299234,322



126,522Weighted average effective interest rates: bank loans


3.10
%


4.20
% loans from CNPC and fellow CNPC subsidiaries


3.21
%


4.32
% corporate debentures


4.31
%


4.51
% medium-term notes


2.78
%


 short-term notes


2.01
%


 other loans


2.22
%


3.05
%     Carrying AmountsDecember 31,


December 31,2009


2008RMB


RMBBank loans


22,764



13,331Loans from CNPC and fellow CNPC subsidiaries


27,384



20,179Corporate debentures


4,136



4,314Medium-term notes


45,000



Other


416



92699,700



38,750   F-35




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  Fair ValuesDecember 31,


December 31,2009


2008RMB


RMBBank loans


22,601



13,111Loans from CNPC and fellow CNPC subsidiaries


27,377



20,179Corporate debentures


4,146



4,020Medium-term notes


43,587



Other


350



79898,061



38,108       December 31,


December 31,Bank Loans

2009


2008RMB


RMBWithin one year


8,756



579Between one to two years


2,996



9,991Between two to five years


10,668



2,395After five years


344



36622,764



13,331   December 31,


December 31,Loans Other than Bank Loans

2009


2008RMB


RMBWithin one year


5,473



5,319Between one to two years


9,216



5,451Between two to five years


52,153



5,037After five years


10,094



9,61276,936



25,419   29  SHARE
    CAPITAL
  December 31,


December 31,2009


2008RMB


RMBRegistered, issued and fully paid:A shares


161,922



161,922H shares


21,099



21,099183,021



183,021  F-36




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
               F-37




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  30  RESERVES
  2009


2008RMB


RMBRevaluation ReserveBeginning balance


79,946



79,946Ending balance


79,946



79,946Capital ReserveBeginning balance


53,362



53,362Ending balance


53,362



53,362Statutory Common Reserve Fund(Note a)Beginning balance


115,466



102,696Transfer from retained earnings


9,981



12,770Ending balance


125,447



115,466Special Reserve-Safety Fund ReserveBeginning balance


6,750



3,536Safety fund reserve


1,325



3,214Ending balance


8,075



6,750Currency translation differencesBeginning balance


(2,726
)


(1,554
)Currency translation differences


(1,460
)


(1,172
)Ending balance


(4,186
)


(2,726
)Other reservesBeginning balance


(23,382
)


(16,401
)Purchase of non-controlling interest in subsidiaries


(179
)


(17
)Acquisition of subsidiaries


(248
)


(6,693
)Capital reduction of a subsidiary






(61
)Fair value gain/(loss) on
    available-for-sale
    financial assets


140



(237
)Capital contribution from non-controlling interest


1,158



Other


2



27Ending balance


(22,509
)


(23,382
)240,135



229,416     (a)
    
    Pursuant to the PRC regulations and the Companys Articles
    of Association, the Company is required to transfer 10% of its
    net profit, as determined under the PRC accounting regulations,
    to a Statutory Common Reserve Fund (Reserve Fund).
    Appropriation to the Reserve Fund may cease when the fund
    aggregates to 50% of the Companys registered capital. The
    transfer to this reserve must be made before distribution of
    dividends to shareholders.The Reserve Fund shall only be used to make good previous
    years losses, to expand the Companys production
    operations, or to increase the capital of the Company. Upon
    approval of a resolution of shareholders in a general
    meeting, the Company may convert its Reserve Fund into share
    capital and issue bonus shares to existing shareholders in
    proportion to their original shareholdings or to increase the
    nominal value of each share currently held by them, provided
    that the balance of the Reserve Fund after such issuance is not
    less than 25% of the Companys registered capital. F-38




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
   (b)
    
    According to the relevant PRC regulations, the distributable
    reserve is the lower of the retained earnings computed under PRC
    accounting regulations and IFRS. As of December 31, 2009,
    the Companys distributable reserve amounted to RMB 358,415
    (2008: RMB 316,708).  31  DEFERRED
    TAXATION
      Year Ended December 31,2009


2008


2007RMB


RMB


RMBAt beginning of the year


11,969



20,571



19,979Transfer to profit and loss (Note 12)


8,611



(8,212
)


807Charge/(credit) to other comprehensive income


38



(67
)


87Acquisition of a subsidiary


991







(174
)Currency translation differences


(420
)


(364
)


(128
)Others


(29
)


41



At end of the year


21,160



11,969



20,571     December 31,


December 31,2009


2008RMB


RMBDeferred tax assets:Current:Receivables and inventories


7,173



9,165Tax losses of subsidiaries


166



294Non-current:Impairment of long-term assets


3,983



4,580Other


2,379



885Total deferred tax assets


13,701



14,924Deferred tax liabilities:Non-current:Accelerated tax depreciation


32,348



24,613Other


2,513



2,280Total deferred tax liabilities


34,861



26,893Net deferred tax liabilities


21,160



11,969  F-39




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
    December 31,

December 31,2009

2008RMB

RMBDeferred tax assets


289



497Deferred tax liabilities


21,449



12,466     32  ASSET
    RETIREMENT OBLIGATIONS
  2009


2008


2007RMB


RMB


RMBAt beginning of the year


36,262



24,761



18,481Liabilities incurred


7,162



10,033



4,818Consolidation of PetroKazakhstan Inc.










385Liabilities settled


(434
)


(169
)


(110
)Accretion expense (Note 10)


1,943



1,746



1,202Currency translation differences


(186
)


(109
)


(15
)At end of the year


44,747



36,262



24,761     33  PENSIONS
    34  CONTINGENT
    LIABILITIES
  (a)  Bank
    and other guarantees
    (b)  Environmental
    liabilities
    (c)  Legal
    contingencies
   F-40




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##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  (d)  Leasing
    of roads, land and buildings
      (e)  Group
    insurance
    35  COMMITMENTS
  (a)  Operating
    lease commitments
    December 31,


December 31,2009


2008RMB


RMBNo later than one year


4,071



3,634Later than one year and no later than five years


12,478



12,492Later than five years


77,385



78,97093,934



95,096   (b)  Capital
    commitments
    (c)  Exploration
    and production licenses
   F-41




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##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
    December 31,


December 31,2009


2008RMB


RMBWithin one year


1,000



1,000Between one and two years


1,000



1,000Between two and three years


1,000



1,000Between three and four years


1,000



1,000Between four and five years


1,000



1,000   36  MAJOR
    CUSTOMERS
    2009


2008


2007Percentage





Percentage





Percentageof total





of total





of TotalRevenue


revenue


Revenue


revenue


Revenue


revenueRMB


%


RMB


%


RMB


%China Petroleum & Chemical Corporation


67,137



7



57,594



5



50,292



6CNPC and its subsidiaries


32,437



3



46,645



4



31,325



499,574



10



104,239



9



81,617



10   37  RELATED
    PARTY TRANSACTIONS
      (a)  Transactions
    with CNPC and its subsidiaries, associates and jointly
    controlled entities of the Group
       F-42




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##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
    
    Sales of goods represent the sale of crude oil, refined
    products, chemical products and natural gas, etc. The total
    amount of these transactions amounted to RMB 37,448 in the year
    ended December 31, 2009 (2008: RMB 51,714, 2007: RMB
    49,662).
    Sales of services principally represent the provision of
    services in connection with the transportation of crude oil and
    natural gas, etc. The total amount of these transactions
    amounted to RMB 7,128 in the year ended December 31, 2009
    (2008: RMB 9,300, 2007: RMB 3,418).
    Purchases of goods and services principally represent
    construction and technical services, production services, social
    services, ancillary services and material supply services, etc.
    The total amount of these transactions amounted to RMB 199,826
    in the year ended December 31, 2009 (2008: RMB 204,670,
    2007: RMB 169,755).
    Purchase of assets principally represent the purchases of
    manufacturing equipment, office equipment and transportation
    equipment, etc. The total amount of these transactions amounted
    to RMB 2,327 in the year ended December 31, 2009 (2008: RMB
    3,576, 2007: RMB 2,404).
    Amounts due from and to CNPC and its subsidiaries, associates
    and jointly controlled entities of the Group included in the
    following accounts captions are summarised as follows:  December 31,


December 31,2009


2008RMB


RMBAccounts receivable


3,780



4,737Prepayments and other receivables


16,548



15,816Accounts payable and accrued liabilities


57,076



42,121   
    Interest income represents interests from deposits placed with
    CP Finance. The total interest income amounted to RMB 143 in the
    year ended December 31, 2009 (2008: RMB 114, 2007: RMB
    159). The balance of deposits at 31 December 2009 was RMB
    10,433 (2008: RMB 8,424).
    Purchases of financial service principally represent interest
    charged on the loans from CNPC and fellow CNPC subsidiaries,
    insurance fee, etc. The total amount of these transactions
    amounted to RMB 3,541 in the year ended December 31, 2009
    (2008: RMB 1,623, 2007: RMB 1,388). Information on loans
    from related parties are included in Note 28.     F-43




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  (b)  Key
    management compensation
  Year Ended December 312009


2008


2007RMB000


RMB000


RMB000Emoluments and other benefits


9,885



10,581



10,273Contribution to retirement benefit scheme


479



444



34510,364



11,025



10,618   (c)  Transactions
    with other state-controlled entities in the PRC
              38  SEGMENT
    INFORMATION
                   F-44




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
        Exploration


Refining





Naturaland


and





Gas andYear Ended December 31, 2009

Production


Chemicals


Marketing


Pipeline


Other


TotalRMB


RMB


RMB


RMB


RMB


RMBTurnover


405,326



501,300



768,295



77,658



1,372



1,753,951Less: intersegment sales


(308,649
)


(381,522
)


(35,489
)


(8,756
)


(260
)


(734,676
)Turnover from external customers


96,677



119,778



732,806



68,902



1,112



1,019,275Depreciation, depletion and amortisation


(64,595
)


(11,824
)


(7,088
)


(7,694
)


(1,058
)


(92,259
)Profit/(loss) from operations


105,019



17,308



13,265



19,046



(11,194
)


143,444Finance costs:Exchange gain






















552Exchange loss






















(1,335
)Interest income






















1,459Interest expense






















(5,272
)Total net finance costs






















(4,596
)Share of profit of associates and jointly controlled entities


590



53



519



8



14



1,184Profit before income tax expense






















140,032Income tax expense






















(33,473
)Profit for the year






















106,559Segment assets


756,122



256,040



237,534



198,774



1,095,827



2,544,297Other assets






















289Investments in associates and jointly controlled entities


22,183



579



5,393



68







28,223Elimination of intersegment balances(a)






















(1,122,521
)Total assets






















1,450,288Segment capital expenditure and acquisition Capital expenditure


129,017



42,558



18,174



74,754



2,333



266,836 Acquisition (Note 21)










15,296











15,296282,132Segment liabilities


280,573



98,590



142,254



92,538



357,107



971,062Other liabilities






















56,412Elimination of intersegment balances(a)






















(484,887
)Total liabilities






















542,587   F-45




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  Exploration


Refining





Naturaland


and





Gas andYear Ended December 31, 2008

Production


Chemicals


Marketing


Pipeline


Other


TotalRMB


RMB


RMB


RMB


RMB


RMBTurnover


626,367



560,729



778,141



63,315



1,418



2,029,970Less: intersegment sales


(500,522
)


(396,410
)


(53,557
)


(6,706
)


(171
)


(957,366
)Turnover from external customers


125,845



164,319



724,584



56,609



1,247



1,072,604Depreciation, depletion and amortisation


(58,927
)


(22,796
)


(5,871
)


(6,310
)


(855
)


(94,759
)Profit/(loss) from operations


240,470



(93,830
)


7,982



16,057



(11,108
)


159,571Finance costs:Exchange gain






















1,774Exchange loss






















(2,855
)Interest income






















2,277Interest expense






















(3,044
)Total net finance costs






















(1,848
)Share of profit/(loss) of associates and jointly controlled
    entities


4,561



(609
)


314



5



19



4,290Profit before income tax expense






















162,013Income tax expense






















(35,211
)Profit for the year






















126,802Segment assets


662,454



290,758



197,950



121,368



973,128



2,245,658Other assets






















497Investments in associates and jointly controlled entities


24,021



1,686



3,074



20



49



28,850Elimination of intersegment balances(a)






















(1,078,770
)Total assets






















1,196,235Segment capital expenditure


157,194



30,619



4,974



36,848



2,742



232,377Segment liabilities


264,230



70,879



132,340



53,294



334,972



855,715Other liabilities






















27,667Elimination of intersegment balances(a)






















(534,987
)Total liabilities






















348,395   F-46




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  Exploration


Refining





Naturaland


and





Gas andYear Ended December 31, 2007

Production


Chemicals


Marketing


Pipeline


Other


TotalRMB


RMB


RMB


RMB


RMB


RMBTurnover


473,117



481,726



584,115



50,066



1,718



1,590,742Less: intersegment sales


(378,888
)


(330,281
)


(36,773
)


(6,610
)


(648
)


(753,200
)Turnover from external customers


94,229



151,445



547,342



43,456



1,070



837,542Depreciation, depletion and amortisation


(43,731
)


(11,504
)


(5,615
)


(5,926
)


(647
)


(67,423
)Profit/(loss) from operations


207,749



(23,659
)


10,810



12,495



(6,378
)


201,017Finance costs:Exchange gain






















1,808Exchange loss






















(2,559
)Interest income






















2,101Interest expense






















(3,673
)Total net finance costs






















(2,323
)Share of profit of associates and jointly controlled entities


5,908



463



55



2



17



6,445Profit before income tax expense






















205,139Income tax expense






















(49,802
)Profit for the year






















155,337Segment assets


558,589



212,179



151,758



80,252



819,153



1,821,931Other assets






















307Investments in associates and jointly controlled entities


21,069



2,279



2,734



17



68



26,167Elimination of intersegment balances(a)






















(778,794
)Total assets






















1,069,611Segment capital expenditure


135,351



21,499



13,212



11,003



1,613



182,678Segment liabilities


227,965



75,155



98,023



39,790



188,774



629,707Other liabilities






















43,792Elimination of intersegment balances(a)






















(386,607
)Total liabilities






















286,892   Geographical
    information
  Turnover


Non-Current Assets(b)Year Ended December 31,

2009


2008


2007


2009


2008


2007RMB


RMB


RMB


RMB


RMB


RMBMainland China


790,748



824,703



716,134



1,073,865



902,370



765,571Other


228,527



247,901



121,408



78,078



63,878



60,0571,019,275



1,072,604



837,542



1,151,943



966,248



825,628     (a)
    
    Elimination of intersegment balances represents elimination of
    intersegment accounts and investments.(b)
    
    Non-current assets mainly include non-current assets other than
    financial instruments and deferred tax assets. F-47




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  NOTES TO THE FINANCIAL STATEMENTS 
    (Continued)
    (Amounts in millions unless otherwise stated)
  39  EVENTS
    AFTER THE REPORTING PERIOD
        40  APPROVAL
    OF FINANCIAL STATEMENTS
   F-48




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
  SUPPLEMENTARY
    INFORMATION ON OIL AND GAS EXPLORATION AND
 PRODUCTION ACTIVITIES (UNAUDITED)
 (Amounts in millions unless otherwise stated)
  2010-03
      Proved
    Oil and Gas Reserve Estimates
      12-month first-day-of-the-month
         F-49




---



##### Table of Contents



PETROCHINA
    COMPANY LIMITED
    SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION AND
    PRODUCTION ACTIVITIES (UNAUDITED)
    (Amounts in millions unless otherwise stated)
      Crude Oil and





TotalCondensate


Natural Gas


 All Products(Millions


(Billions


(Million barrels ofof barrels)


of cubic feet)


oil equivalent)Proved developed and undeveloped reservesThe GroupReserves at December 31, 2006


11,618



53,469



20,529Changes resulting from:Revisions of previous estimates


84



(1,062
)


(93
)Improved recovery


79







79Extensions and discoveries


764



6,331



1,819Production


(839
)


(1,627
)


(1,110
)Reserves at December 31, 2007


11,706



57,111



21,224Changes resulting from:Revisions of previous estimates


(574
)


(637
)


(680
)Improved recovery


75







75Extensions and discoveries


885



6,579



1,982Production


(871
)


(1,864
)


(1,181
)Reserves at December 31, 2008


11,221



61,189



21,420Changes resulting from:Revisions of previous estimates


(192
)


(1,273
)


(405
)Improved recovery


73







73Extensions and discoveries


1,005



5,440



1,911Production


(844
)


(2,112
)


(1,196
)Reserves at December 31, 2009


11,263



63,244



21,803Proved developed reserves at:December 31, 2007


9,047



26,047



13,388December 31, 2008


8,324



26,667



12,769December 31, 2009


7,871



30,949



13,029Proved undeveloped reserves at:December 31, 2007


2,659



31,064



7,836December 31, 2008


2,897



34,522



8,651December 31, 2009


3,392



32,295



8,774Equity method investmentsShare of proved developed and undeveloped reserves of associates
    and jointly controlled entitiesDecember 31, 2007


141



79



154December 31, 2008


372



65



383December 31, 2009


310



50



319    F-50




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##### Table of Contents



PETROCHINA
    COMPANY LIMITED
    SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION AND
    PRODUCTION ACTIVITIES (UNAUDITED)
    (Amounts in millions unless otherwise stated)
      Capitalised
    Costs
  December 31,


December 31,2009


2008RMB


RMBThe GroupProperty costs and producing assets


666,644



592,122Support facilities


222,205



197,919Construction-in-progress


61,581



59,078Total capitalised costs


950,430



849,119Accumulated depreciation, depletion and amortisation


(369,437
)


(317,233
)Net capitalised costs


580,993



531,886Equity method investmentsShare of net capitalised costs of associates and jointly
    controlled entities


13,020



17,237   Costs
    Incurred for Property Acquisitions, Exploration and Development
    Activities
  Year Ended December 31, 2009MainlandChina


Other


TotalRMB


RMB


RMBThe GroupProperty acquisition and exploration costs


29,786



2,949



32,735Development costs


94,130



5,977



100,107Total


123,916



8,926



132,842Equity method investmentsShare of costs of property acquisition, exploration and
    development of associates and jointly controlled entities






1,620



1,620   F-51




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##### Table of Contents



PETROCHINA
    COMPANY LIMITED
    SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION AND
    PRODUCTION ACTIVITIES (UNAUDITED)
    (Amounts in millions unless otherwise stated)
  Year Ended December 31, 2008MainlandChina


Other


TotalRMB


RMB


RMBThe GroupProperty acquisition and exploration costs


34,773



2,895



37,668Development costs


117,772



7,083



124,855Total


152,545



9,978



162,523Equity method investmentsShare of costs of property acquisition, exploration and
    development of associates and jointly controlled entities






4,003



4,003   Year Ended December 31, 2007MainlandChina


Other


TotalRMB


RMB


RMBThe GroupProperty acquisition and exploration costs


35,070



1,350



36,420Development costs


90,427



6,022



96,449Total


125,497



7,372



132,869Equity method investmentsShare of costs of property acquisition, exploration and
    development of associates and jointly controlled entities






2,798



2,798  F-52




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##### Table of Contents



PETROCHINA
    COMPANY LIMITED
    SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION AND
    PRODUCTION ACTIVITIES (UNAUDITED)
    (Amounts in millions unless otherwise stated)
  Results
    of Operations for Oil and Gas Producing Activities
  Year Ended December 31, 2009MainlandChina


Other


TotalRMB


RMB


RMBThe GroupSales and other operating revenuesSales to third parties


62,799



33,878



96,677Intersegment sales


259,847



404



260,251322,646



34,282



356,928Production costs excluding taxes


(68,236
)


(4,355
)


(72,591
)Exploration expenses


(18,426
)


(972
)


(19,398
)Depreciation, depletion and amortisation


(53,018
)


(4,005
)


(57,023
)Taxes other than income taxes


(31,210
)


(9,660
)


(40,870
)Accretion expense


(1,787
)


(156
)


(1,943
)Income taxes


(30,196
)


(3,783
)


(33,979
)Results of operations from producing activities


119,773



11,351



131,124Equity method investmentsShare of profit for producing activities of associates and
    jointly controlled entities






3,326



3,326Total of the Group and equity method investments results of
    operations for producing activities


119,773



14,677



134,450   F-53




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##### Table of Contents



PETROCHINA
    COMPANY LIMITED
    SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION AND
    PRODUCTION ACTIVITIES (UNAUDITED)
    (Amounts in millions unless otherwise stated)
  Year Ended December 31, 2008MainlandChina


Other


TotalRMB


RMB


RMBThe GroupSales and other operating revenuesSales to third parties


72,218



52,169



124,387Intersegment sales


431,203



2,181



433,384503,421



54,350



557,771Production costs excluding taxes


(69,469
)


(5,410
)


(74,879
)Exploration expenses


(20,868
)


(1,011
)


(21,879
)Depreciation, depletion and amortisation


(47,295
)


(3,532
)


(50,827
)Taxes other than income taxes


(99,970
)


(5,843
)


(105,813
)Accretion expense


(1,607
)


(139
)


(1,746
)Income taxes


(52,718
)


(9,604
)


(62,322
)Results of operations from producing activities


211,494



28,811



240,305Equity method investmentsShare of profit for producing activities of associates and
    jointly controlled entities






9,872



9,872Total of the Group and equity method investments results of
    operations for producing activities


211,494



38,683



250,177   Year Ended December 31, 2007MainlandChina


Other


TotalRMB


RMB


RMBThe GroupSales and other operating revenuesSales to third parties


65,709



27,331



93,040Intersegment sales


339,436







339,436405,145



27,331



432,476Production costs excluding taxes


(60,354
)


(2,903
)


(63,257
)Exploration expenses


(19,703
)


(1,253
)


(20,956
)Depreciation, depletion and amortisation


(34,893
)


(2,129
)


(37,022
)Taxes other than income taxes


(56,081
)


(473
)


(56,554
)Accretion expense


(1,108
)


(94
)


(1,202
)Income taxes


(51,487
)


(6,758
)


(58,245
)Results of operations from producing activities


181,519



13,721



195,240Equity method investmentsShare of profit for producing activities of associates and
    jointly controlled entities






5,244



5,244Total of the Group and equity method investments results of
    operations for producing activities


181,519



18,965



200,484  F-54




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##### Table of Contents



PETROCHINA
    COMPANY LIMITED
    SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION AND
    PRODUCTION ACTIVITIES (UNAUDITED)
    (Amounts in millions unless otherwise stated)
  Standardised
    Measure of Discounted Future Net Cash Flows
    RMBThe GroupAt December 31, 2009Future cash inflows from sales of oil and gas


5,045,994Future production costs


(1,628,794
)Future development costs


(479,912
)Future income tax expense


(615,290
)Future net cash flows


2,321,998Discount at 10% for estimated timing of cash flows


(1,244,183
)Standardised measure of discounted future net cash flows


1,077,815   RMBThe GroupAt December 31, 2008Future cash inflows from sales of oil and gas


4,426,893Future production costs


(1,521,416
)Future development costs


(381,498
)Future income tax expense


(522,158
)Future net cash flows


2,001,821Discount at 10% for estimated timing of cash flows


(1,046,896
)Standardised measure of discounted future net cash flows


954,925   RMBThe GroupAt December 31, 2007Future cash inflows from sales of oil and gas


8,714,483Future production costs


(3,049,226
)Future development costs


(437,946
)Future income tax expense


(1,569,898
)Future net cash flows


3,657,413Discount at 10% for estimated timing of cash flows


(1,835,343
)Standardised measure of discounted future net cash flows


1,822,070    F-55




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##### Table of Contents



PETROCHINA
    COMPANY LIMITED
    SUPPLEMENTARY INFORMATION ON OIL AND GAS EXPLORATION AND
    PRODUCTION ACTIVITIES (UNAUDITED)
    (Amounts in millions unless otherwise stated)
    December 31, 2009


26,457December 31, 2008


17,912December 31, 2007


33,543     Changes
    in Standardised Measure of Discounted Future Net Cash
    Flows
    Year Ended December 312009


2008


2007RMB


RMB


RMBThe GroupBeginning of the year


954,925



1,822,070



1,155,345Sales and transfers of oil and gas produced, net of production
    costs


(242,363
)


(375,269
)


(309,269
)Net changes in prices and production costs and other


171,170



(1,448,443
)


804,330Extensions, discoveries and improved recovery


150,846



139,058



256,476Development costs incurred


(8,488
)


67,673



(39,031
)Revisions of previous quantity estimates


(31,516
)


(46,105
)


(3,567
)Accretion of discount


120,396



260,643



171,389Net change in income taxes


(37,155
)


535,298



(213,603
)End of the year


1,077,815



954,925



1,822,070  F-56