Exxon Mobil (NYSE: XOM), the world's largest producer of oil has been dethroned.
It now ranks second to PetroChina, owned by the China National Petroleum Corp., created and owned by the Chinese government.
On Thursday, CNPC officials announced the company produced 2.4 million barrels of oil a day last year. That's 100,000 more than Exxon Mobil, the Associated Press reported.
According to the company's website, CNPC grew by 3.3 percent last year and pumped 886.1 million barrels of oil.
In 2010, the company pumped 2.83 million barrels of oil each day.
Exxon Mobil, in 2011 by contrast, pumped only 2.3 million barrels of oil daily. When combining both oil and natural gas, however, Exxon Mobil produced 4.5 million barrels of oil equivalent, said company spokesman Alan Jeffers.
The announcement comes after Exxon Mobil Chief Rex Tillerson earlier in March announced the Houston-based energy giant intends to invest $185 billion in the next five years to find new energy supplies to meet expected growth in demand.
An unprecedented level of investment will be needed to develop new energy technologies to expand supply of traditional fuels and advance new energy sources, said Tillerson. We are developing a diverse portfolio of high-quality opportunities across all resource types and geographies.
Exxon's Ambitious Goals
The company said it's working on 21 major oil and gas projects that will begin production by 2014.
We don't go after volumes, we go after investments, Jeffers said.
And the company's investment plans are ambitious, and come at a time when big oil companies are scrambling to increase their oil reserves.
Exxon Mobil in November took a gamble in signing a contract with Kurdish government officials for oil and natural gas exploration in northern Iraq. The contract angered Iraqi central government officials in Baghdad who threatened the company's holdings in the south of the country.
Exxon Mobil has since frozen its deal with Kurdistan.
10-Foot Pole Projects
But unlike the U.S. super major, known for being conservative and worried about its bottom line, its returns to investors, its efficiency and profitability, PetroChina is faced with the monumental task of feeding the fastest-growing economy with an ever-increasing demand for oil, said Fadel Gheit, an energy analyst with Oppenheimer.
They go into projects that other companies would not touch with a 10-foot pole, Gheit said.
The Chinese oil company is known for continuing production in old oil fields within China that Western counterparts would have decommissioned long ago.
The company has also been actively investing in Canadian oil. The company has acquired resources in Africa, Qatar, Iraq and Australia, spending $7 billion in acquisitions since 2010. That's roughly twice what Exxon Mobil spent, the AP reported.
In the end, however, Exxon Mobil remains more profitable, but PetroChina does have one unique advantage - it has the financial backing of the Chinese government.
As long as the Chinese economy remains stable, so will CNPC's financing and ability to produce oil.
Petrobras, Gazprom, PetroChina, I don't consider them companies really. They are government agencies. The government is chartering their future, Gheit said.
Exoon Mobil shares fell 27 cents to $85.59 in late Thursday trading.