March 19 (Bloomberg) -- PetroChina Co., China's biggest oil company, said 2006 profit rose 6.6 percent to a record because of higher prices, production and demand as the nation's economy expanded at the quickest pace in 11 years.

Net income climbed to 142.2 billion yuan ($18.4 billion), or 0.79 a share, from 133.4 billion yuan, or 0.75 yuan, a year earlier, the company said in a statement in Hong Kong today. That compares with the median profit estimate of 149.8 billion yuan in a Bloomberg survey of 10 analysts. Sales increased 25 percent to 689 billion yuan.

PetroChina, Exxon Mobil Corp. and Royal Dutch Shell Plc have gained from a five-year bull-run in oil that pushed prices to a record average of $66.25 a barrel in New York last year. PetroChina produced more oil and natural gas than ever before in 2006 as it strained to meet demand in the world's fastest-growing major energy market.

``Long term, the demand picture from Asia is still very much intact,'' Martin Hennecke, a senior manager at independent investment adviser Bridgewater Ltd. in Hong Kong, said before the earnings announcement. That will support oil prices and earnings for Chinese oil companies, he said.

PetroChina, which posted a fifth year of record profit, will pay a final dividend of 0.154699 yuan a share, compared with 0.180325 yuan a year earlier.

Exxon, Shell

The profit is the highest for a publicly traded company in Asia. Toyota Motor Co., Asia's second-most profitable listed company, may post net income of $13.3 billion for the year ending March 31, based on the median estimate of five analysts surveyed by Bloomberg.

Exxon Mobil, the world's largest publicly traded oil company, said Feb. 1 2006 profit rose 9.4 percent to $39.5 billion, a record for a U.S. company. Shell said the same day its full-year profit reached $25.4 billion, the highest for a U.K.-listed company.

Output in 2006 rose 5.2 percent to the equivalent of 2.9 million barrels of oil a day, the company said Jan. 15. The average price the Beijing-based producer got for its oil jumped 24 percent to $59.76 a barrel.

Crude production increased at a slower pace than natural gas. PetroChina's 2006 oil output rose 0.9 percent to 830.7 million barrels, while gas surged 22 percent to 1.38 trillion cubic feet.

Chinese oil companies spent $15 billion buying oil fields and oil companies in 100 countries in five years, McKinsey & Co. said in an August report. That's led to intensified rivalry over energy resources with neighbors India, Japan and South Korea and prompted concern from the likes of Exxon Mobil, Shell and BP Plc that they may lose reserves to Asian state-run companies willing to pay higher prices.

PetroKazakhstan

Access to fields abroad has increased through collaboration with parent China National Petroleum Corp. PetroChina in June 2005 agreed to pay 20.7 billion yuan for a 50 percent stake in its parent's fields in nine countries. The venture excludes the parent's operations in Sudan, which is subject to U.S. sanctions.

PetroChina Chairman Chen Geng last year paid parent China National Petroleum $2.74 billion for 67 percent of PetroKazakhstan Inc. The acquisition may boost the listed unit's production by 5 percent annually for the next five years and help replace depleted reserves.

Oil demand in China, the biggest consumer of the fuel after the U.S., rose 9.3 percent last year as the economy grew 10.7 percent, the most since 1995. Oil consumption climbed to 6.9 million barrels a day, the Ministry of Commerce said in February. Domestic production rose 1.7 percent to 183.7 million tons, while imports of crude and oil products jumped 20 percent to 162.9 million tons, or 47 percent of total demand.

Slowing Momentum

Still, PetroChina's earnings momentum is slowing. The 6.6 percent gain in net income for 2006 compares with the 28 percent jump posted a year earlier, and the 29 percent gain for the first half of last year.

The company's shares, which surged 74 percent in 2006, have lost more than a fifth of their value in Hong Kong this year, compared with the 5 percent decline in the city's benchmark Hang Seng Index.

U.S. billionaire Warren Buffett, PetroChina's largest foreign investor, is under pressure to get rid of the 1.1 percent stake his Berkshire Hathaway Inc. owns in the Chinese oil company.

Berkshire shareholder Judith Porter has submitted a ballot proposal aimed at forcing Berkshire to divest its stake in PetroChina because of the parent company's operations in Sudan, a nation accused of genocide. Investors will vote on the proposal at Berkshire's May 5 annual meeting.

PetroChina may set a further record by holding China's largest domestic share sale, raising funds for expansion. The company has asked regulators to approve a 30 billion yuan listing on the country's so-called A-share market, the official Xinhua news agency reported March 8.

To contact the reporter on this story: Ying Lou in Hong Kong at ylou1@bloomberg.net; Wing-Gar Cheng in Beijing at wgcheng@bloomberg.net.

Last Updated: March 19, 2007 04:29 EDT