Now, From China, the World's Biggest Company

PetroChina's debut on the Shanghai exchange triples its value to more than $1 trillion.

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The meaning of the term "Big Oil" has changed overnight, as state-controlled PetroChina became the first company worth more than $1 trillion, tripling its value Monday in its debut day on the Shanghai Stock Exchange and making it by far the largest company in the world. Analysts are puzzling over whether this cash infusion will transform the energy scene and the role of China in the world economy or whether the Asian market is caught up in an irrational exuberance that will make the dot-com bubble seem small. Here's a primer on PetroChina and what it might mean to you.

Just how big is PetroChina?

By market capitalization, it is now worth more than the two previous global corporate front-runners, ExxonMobil and General Electric, combined. A unit of the state-owned China National Petroleum Corp., PetroChina is unquestionably China's biggest oil producer. But PetroChina makes only one quarter of the revenue that Exxon rakes in, and it also has slightly less in oil and gas reserves—an important factor investors consider when they weigh an oil company's future prospects. Significantly, though, PetroChina's reserves have been growing at about 5 percent a year in recent years, outpacing those of Exxon and other oil giants. What does PetroChina plan to do with all that money?

It's no secret. This year, PetroChina has announced a string of oil and natural gas discoveries and projects. Just two weeks ago, the company announced a major gas field in the northwest Xinjiang region. Earlier this year, PetroChina said it would spend $5.2 billion by 2012 to develop the nation's biggest oil discovery in almost a half a century—the Jidong Nanpu field in northern China's Bohai Bay area. The Chinese government, concerned over China's growing foreign-oil dependence, has been pressing its oil companies to spend more on exploration and development. PetroChina is showing results. But it needs money to turn those discoveries into fuel. Will a cash-infused PetroChina transform the world oil market and ease spiraling crude prices?

That remains to be seen. It is true that if PetroChina were successful in producing more oil for the fast-growing Chinese economy, it would ease the stress on the world market. But PetroChina faces a lot of pressures that its rivals in capitalist countries, like ExxonMobil, don't have to worry about. One of the most significant: Chinese government price controls keep gasoline prices artificially low, so PetroChina's refinery business loses tens of millions of dollars per day. It is not clear whether the company has the strength to carry out its big plans. What does Warren Buffett think of PetroChina?

The legendary billionaire investor once owned 11 percent of PetroChina through shares traded on the Hong Kong market, but this summer and fall, Buffett's Berkshire Hathaway systematically sold its entire stake. It had appreciated to $3.3 billion, up from an original $488 million. Bad market timing for Buffett? Perhaps. But Buffett had said that the market had become "too hot," and though he wrote a letter to Jiang Jiemin, PetroChina's chairman, thanking him for doing a "terrific" job for shareholders, the time had come to get out. What's all this about PetroChina and Darfur?

PetroChina's massive initial public offering comes near the end of a year when human rights activists have been ramping up a campaign for divestment in PetroChina as a means to pressure the Sudanese government about the bloody conflict in Darfur. PetroChina's parent, CNPC, is the largest player in Sudan's oil and natural gas industry. The activists say the oil money has helped prop up a regime that has been accused of sponsoring brutal militia campaigns in the western Darfur region, which President Bush has called a "genocide." Activists initially took credit when Buffett sold his PetroChina stake, and also earlier this year, when Fidelity Investments sold 90 percent of its 4.5 million PetroChina shares traded on the New York Stock Exchange. But both Buffett and Fidelity said their decisions were based purely on financial considerations. Although the IPO's success suggests that the activists haven't exactly dampened investor interest in PetroChina, questions over China's role in Sudan are likely to continue. And PetroChina is a bigger target for protest than it's ever been before.