Petroliam Nasional Berhad, commonly known as PETRONAS (stylised in all caps), is a Malaysian multinational oil and gas company headquartered in Kuala Lumpur.[6][7][8] Established in 1974, it is a legal entity incorporated under the Malaysian Companies Act 1965 and reports to the company's Board of Directors. Petronas is vested with all oil and gas resources in Malaysia and is entrusted with the responsibility of developing and adding value to these resources.[9][10]
Petronas is a vertically integrated company and actively in all areas of the oil and gas industry, including exploration and extraction, refining, distribution and marketing, power generation, and trading.[11] Petronas has operations in over 100 countries and has sales office in 22 countries,[12][13] produced around 9 billion barrels of oil equivalent and 50 trillion cubic feet of gas[14] and has around 1,000 service stations nationwide as well as 1,200 Engen stations in South Africa and Sub-Saharan Africa.[13] As of 31 December 2024, Petronas had total proved reserves of 24.5 e6oilbbl of oil equivalent per day.[15]
The company also has a strong presence in the lubricants market through its wholly owned subsidiary Petronas Lubricants International, which operated in over 100 markets internationally.[16] Petronas Carigali, its principal subsidiary and one of its largest businesses, responsible for hydrocarbon exploration and production. Other subsidiaries include Petronas Dagangan, for gas trading and marketing, and Petronas Chemicals for petrochemical as well as Gentari for clean energy use and commercialization. It also offers higher education through its university, the Universiti Teknologi Petronas (UTP).[17] The Malaysia Petroleum Management (MPM), its key division and a governing body for the petroleum resources development since Petronas' establishment, oversaws the entire lifecycle of the country's upstream oil and gas assets.[18]
In the annual Fortune Global 500 list for 2022, Petronas was ranked at 216th. It also ranked 48th globally in the 2020 Bentley Infrastructure 500.[19] The Financial Times has identified Petronas as one of the "new seven sisters",[20] considered to be influential and mainly state-owned national oil and gas companies from countries outside the Organisation for Economic Co-operation and Development (OECD).[20] Petronas provides a substantial source of income for the Malaysian government, accounting for more than 15% of the government's revenue from 2015 to 2020.[21]
A total of 0.69 percent of the gases released through global industrial processes from 1988 to 2015 came from the company's activities.[22] Therefore, Petronas is a major contributor to climate change, a phenomenon that poses many risks to health, jobs, food and water supply stability, security, and economic development.[23] The company celebrated its 50th anniversary in 2024.[24][25]
History
Origins
Before the formation of Malaysia, Royal Dutch Shell (now Shell plc) first began the oil exploration in Miri, Sarawak after Charles Brooke signed the first Oil Mining Lease in 1909. In 1910, the first oil well was drilled in Miri. This oil well is later known as the Grand Old Lady.[26][27] In 1929, oil was discovered in Brunei. There were no other drilling activities in Borneo or British Malaya until the 1950s.[28] Shell was still the only oil company in the area in 1963, when the Federation of Malaya, having achieved independence from Britain six years earlier, united with Sarawak and Sabah, both on the island of Borneo, to become Malaysia. Authorities in both new states maintained a close relationship with Shell, which brought Malaysia's first offshore oilfield to fruition in 1968.[28]
Corporate affairs
PETRONAS is a legal entity incorporated under the 1965 Malaysian Companies Act and reports to the company's Board of Directors. The Malaysian federal government is the sole shareholder of the company. Key positions in the company are all appointees from the federal government. The federal government also controls the amount of dividend payout to finance the yearly budget of the country.[224] In December 2019, Prime Minister Mahathir Mohamad mooted an idea of selling a percentage of PETRONAS stake to Sabah and Sarawak because the Pakatan Harapan government was unable to fulfill its promise of giving 20% oil royalty to both the states.[225] The price of the purchase was reported to be RM8 billion for one per cent of the company. The proposal was met with a cold response from Sarawak. This is because once the shares are bought, Sarawak can only become a minority shareholder. Sarawak therefore would not have much of a voice in the PETRONAS board meetings. Due to its high share price, the money, once invested, may also have difficulties breaking even in the future.[226] A lawmaker from Sarawak stated that PETRONAS acts as a trustee for the oil and gas fields in both the states; therefore, it makes no sense of buying a property that should have already been owned by the state governments.[227]
Visual identity
Petronas introduced its corporate logo which was created in 1974 by Dato' Johan Ariff from Johan Design Associates.[243] The basic structure of Petronas logo is geometric, embodying metaphoric and alpha glyphic nuances of an oil drop and a typography 'P', the latter being evident in the triangle assigned at the top right corner. The triangle is also an essential element to define directional movement and dynamic. The placement of a solid circle in the logo is interpretive of the wheel in the oil and gas industry while the outline of the drop simulates a driving system, the energy which is derived from petroleum. The corporate colour chosen for the logo is emerald green, referencing the sea where oil and gas is procured.[244][245] On 22 July 2013, Petronas unveiled a refreshed version of its corporate logo in that year's Asia Oil and Gas Conference, symbolising the growth and progression of its brand. It is the third iteration of the logo.[246][247][248]
Operations
Business segments
Petronas is organised into four major business segments:[249]
- Upstream — manages the upstream business. It searches for and recovers crude oil and natural gas and operates the upstream and midstream infrastructure necessary to deliver oil and gas to the market. Its activities are organised primarily within geographic units, although there are some activities that are managed across the business or provided through support units.
- Gas and Energy — manages to liquefy natural gas, converting gas to liquids and low-carbon opportunities.
- Downstream — manages Petronas' manufacturing, distribution, and marketing activities for oil products and chemicals. Manufacturing and supply include refinery, supply, and shipping of crude oil.
- Project Delivery and Technology — manages the delivery of Petronas' major projects, provides technical services and technology capability covering both upstream and downstream activities. It is also responsible for providing functional leadership across Petronas in the areas of health, safety and environment, and contracting and procurement.
Oil and gas activities
Sports partnerships
Motorsports
Auto racing
PETRONAS was one of the main sponsors of the BMW Sauber Formula One team alongside Intel, and supplied lubricants and fuel to the team. It also owned 40% of Sauber PETRONAS Engineering, the company that builds chassis which formerly used Ferrari designed engines used by the Sauber team, until being bought out by German motor company BMW. PETRONAS was also the main sponsor for the Malaysian Grand Prix, and co-sponsored the Chinese Grand Prix, and the inaugural Korean Grand Prix. PETRONAS was the exclusive premium partner of the Sauber PETRONAS (1995–2005) and BMW Sauber (2006–2009) F1 teams. BMW had acquired the controlling stake of the former Sauber PETRONAS Engineering, but left the sport after the 2009 season. On 21 December 2009, PETRONAS was confirmed as moving from BMW Sauber to the newly formed Mercedes AMG PETRONAS Formula One team.[262]
Automotive manufacturers
Petronas once developed its own race bike. Initially, this racing bike will be fielded in the WorldSBK racing event. The desire began in 2002, when Petronas was already a partner of the Sauber racing team in Formula 1. The base used was the Petronas GP1, which was originally prepared to go down in MotoGP. But, it was changed to pass WorldSBK homologation. For its development, Petronas worked with Suter Racing Technology. The Petronas FP1 is ready for mass production, to meet WorldSBK regulations.
Petronas is working with MSX International in the UK to make 75 units of the road version of the FP1. The remaining 75 units are made by Modenas, a Malaysian motorcycle brand. In terms of specifications, this bike is quite powerful. It uses an in-line 3-cylinder engine, DOHC, 4 valves per cylinder, with a capacity of 899.5 cc, and liquid-cooled. The engine produces 127.4 tk of power at 10,000 rpm and 92 Nm of torque at 9,700 rpm.
Petronas had formed the Foggy Petronas Racing team to compete in WorldSBK. The team is led by Carl Fogarty, a former legendary WorldSBK rider. For the riders, Troy Corser, Chris Walker, and Garry McCoy were selected.
However, during the 5 years the team competed in WorldSBK, Petronas FP1 was less competitive. One of the reasons was the change in regulations in 2003. Previously, 3-cylinder engines were limited to 900 cc. But, it was revised to 1,000 cc.
Education
PETRONAS bestows educational sponsorships in the form of convertible loans upon both Malaysian and international students, facilitating their pursuit of higher education at local or overseas universities. Overseeing educational matters is the Sponsorship & Talent Sourcing Unit (STS), an arm of PETRONAS. These sponsorships are granted based on academic accomplishments, extracurricular involvements, family background, and an evaluation of the student's character (assessed through the EduCamp program, mandatory for all aspiring PETRONAS scholars). Upon successful completion of their tertiary studies, scholars absorbed into PETRONAS have their convertible loans transformed into comprehensive scholarships. These scholars are contractually obliged to serve the company for a period of two years for each year of sponsorship. PETRONAS has its own research university, Universiti Teknologi PETRONAS (UTP). Built in 1997, the campus is located in Seri Iskandar, Perak.
Controversies
War crimes allegations in Sudan
In June 2010, the European Coalition on Oil in Sudan (ECOS)[266] published the report "Unpaid Debt",[267] that called upon the governments of Sweden, Austria, and Malaysia to look into allegations that PETRONAS, Fida Aziz, Lundin Petroleum, and OMV may have been complicit in the commission of war crimes and crimes against humanity while operating in Block 5A, South Sudan (then Sudan), during the period 1997–2003. The reported crimes include indiscriminate attacks and intentional targeting of civilians, burning of shelters, pillage, destruction of objects necessary for survival, unlawful killing of civilians, rape of women, abduction of children, torture, and forced displacement. When the consortium that PETRONAS took part in operated in Block 5A, approximately 12,000 people died, and 160,000 were violently displaced from their land and homes, many forever. Satellite pictures taken between 1994 and 2003 show that the activities of PETRONAS in Sudan coincided with a spectacular drop in agricultural land use in its concession area.[268]
See also
Bibliography
External links
References
- PETRONAS Bids Farewell To Tan Sri Wan Zulkiflee As Its President & Group CEO; Welcomes The Appointment Of Tengku Muhammad Taufik As The New PETRONAS' President & Group CEO PETRONAS, retrieved 7 July 2020^
- Petronas records higher net profit for FY16, to pay out RM13b in dividend to govt: CEO New Straits Times, 14 March 2017, retrieved 8 May 2017^
- Petronas posts RM3.4 billion net loss in Q3 on assets impairment