Buffett cuts PetroChina stake for 6th time

By Ying Lou, Bloomberg

HONG KONG — Warren Buffett’s Berkshire Hathaway Inc. sold HK$2.8 billion (US$364 million) of PetroChina Co. shares, the biggest reduction in his stake since the U.S. billionaire first invested in China’s largest oil producer. Berkshire sold 220.5 million shares at an average HK$12.80 on Sept. 25, cutting its stake to 5.44 percent of the stock not controlled by the Chinese government, a Hong Kong stock exchange filing showed Tuesday.

Buffett has sold 1.19 billion PetroChina shares this year, or almost half of his holdings, according to calculations based on stock exchange filings and Berkshire’s annual report. The stock has gained sevenfold since Berkshire bought its stake for less than HK$1.70 a share in April 2003. Activists have urged investors to sell out of PetroChina because of links to Sudan, whose government is accused by the U.S. of supporting genocide.

PetroChina is controlled by state-owned China National Petroleum Corp., which has been developing oil fields since 1996 in Sudan, where 200,000 people have died and 2 million made homeless in the civil war in the western Darfur region.

The Save Darfur Coalition on Sept. 5 called on funds including Fidelity Investments, Vanguard Group and American Funds to sell their PetroChina stakes.

Berkshire’s stake, worth about US$3.3 billion at the end of last year, was equal to about 1.1 percent of PetroChina’s entire capital. Buffett paid US$488 million for the holding in 2003. PetroChina shares have gained 17 percent since Buffett first sold his stake in July, reaching a record HK$14.94 on Oct. 2. The shares rose 1.3 percent to HK$14.28 at the market’s 4 p.m. close. The stock has gained 30 percent this year, compared with a 41 percent increase in the benchmark Hang Seng Index.

This is the sixth time since July that Buffett has disclosed to the Hong Kong exchange that he has sold PetroChina shares. Under the city’s Securities and Futures Ordinance, an investor with a stake of 5 percent or more must notify the exchange when the percentage of shares crosses a full percentage point within three business days.