Financial Analysis of PetroChina under the Framework of Harvard

The recovery of the world economy propels rising energy demand and crude prices. As of 2023, the EU's CBAM imposes carbon taxes on high-carbon products, causing companies to redirect investments and leading to oil price fluctuations. Meanwhile, China's Carbon Peaking and Carbon Neutrality goals promote green project demand, challenging PetroChinas profitability, capital structure, and competitiveness. This essay applies the Harvard Analytical Framework, emphasizing three fundamental dimensions industry environment, corporate strategy, and financial performance. The aim is to systematically analyze PetroChina's financial performance. Through the identification of its potential opportunities and threats, this study hopes to offer practical implications for future strategic planning. The analysis integrates PESTEL analysis and asset impairment stress testing to weigh the paradox of rising EU CBAM-driven costs versus more refinery investments, in addition to considering the implications of global decarbonization trends that may further stress PetroChina's operational and financial projections. Key findings are that PetroChina under-impairs refinery assets in order to artificially maintain short-term profitability at the cost of overestimating transition risks with progressing global decarbonization.