The stock of Petrochina, China's biggest oil company, fell nearly 5 percent intraday, but recovered to close down 2.5 percent. Its rival, Sinopec, sank more than 8 percent at one point, but ended with a net loss of 1.5 percent. BP sold its shares of PetroChina at an 8 percent discount to market, pocketing US$1.65 billion in the process. While the divestment of interest by BP may not have come as a surprise to the market, it has created a short-term negative impact for China oil plays. PetroChina's Hong Kong listed shares account for 10 percent of its total share capital. Shares of PetroChina have almost tripled in the past year. But this past week, it has taken a hit with rumblings of BP's imminent exit. The share sale would eventually have a positive impact, as it raises its H-share free float and will boost its index weighting. Alex Wong, Director, RexCapital Asset Management, said: "At the moment, oil prices are holding quite firm and also Hong Kong people/investors are a bit short-term so they basically focus on short-term valuations yardsticks such as P/E ratios and dividend yield. Therefore, PetroChina should still be quite well supported because their earnings would be driven higher by continuous high level of oil prices. " China, the world's sixth largest oil producer at 3.3 million barrels a day, has overtaken Japan to become the world's second biggest petroleum consumer. The market is now fretting over Sinopec as BP also has a stake in China's biggest crude oil refiner. However, analysts reckon BP is not about to cash out of Sinopec anytime soon it is already committed to a 50 percent joint venture to build a plant in Shanghai. Sinopec has been a prime suspect for divestment because it has the largest number of strategic investors including ExxonMobil and Shell. Despite a steep decline in recent days, it has posted gains similar to PetroChina in the past year. Mr Alex Wong said: "I think Sinopec is a more diversified player and also the downstream is more important to Sinopec than PetroChina. It'll still be positive because the end product has risen quite sharply so the profit margin should be enhanced by this rally in end product prices." It seems on the back of strong economic growth and as a net importer of crude oil, prospects for Chinese oil companies remain undiminished. The prominent US-investor, Warren Buffet, has over 2 billion shares in PetroChina and is unlikely to sell anytime soon. PIN//CNA