PETROCHINA Co, the nation's largest oil producer, plans to raise up to 60 billion yuan (US$8.7 billion) through a domestic corporate bond sale as record high crude oil prices strain its finances.

The bonds may be sold in one or several tranches and will have maturities of up to 15 years, the company said in a stock exchange filing yesterday.

PetroChina said the bond sale aims to satisfy its mid- and long-term operational needs, further improve its debt structure, reduce financing costs and supplement working capital. It said part of the proceeds could also be used to finance projects such as the second west-east natural gas pipeline across China.

The proposed issue would be the largest bond sale by a listed company in China and equal to the bond issue by the Ministry of Railways last year. The bond issue is subject to shareholder and regulatory approval.

Analysts said the firm took this course of action because the widening refining losses are squeezing the finances of PetroChina, at a time when the firm is raising investment spending upstream to boost energy supplies.

"Besides refining losses, PetroChina is also subject to a huge, increasing windfall tax payment on its crude sales. So the huge bond issue would ease PetroChina's capital situation," Orient Securities analyst Wang Jing said.

The Beijing-based firm lost 20.68 billion yuan in the marketing and refining sectors and paid 15.67 billion yuan in windfall taxes on crude sales last year. It has planned a 15 percent increase in capital expenditure this year to 207.9 billion yuan. The refining business is loss making in China because of the government control on fuel prices.

Meanwhile, PetroChina also said its board has approved the buying of 208 gas stations and 25 fuel storage facilities from parent China National Petroleum Corp for 1 billion yuan.

PetroChina fell 1.43 percent to 15.90 yuan in Shanghai and was down 0.77 percent at HK$10.32 (US$1.32) in Hong Kong.