The Brief History and Background of Petronas

Table of Content

Petronas is an acronym for Petroliam Nasional Berhad. It was established in 17 August 1974 as the national oil company for Malaysia. Petronas which is entirely owned by the authorities it is the corporation which is vested with the full oil and gas resources in Malaysia and is entrusted with the duty of developing and adding value to these resources. Petronas has grown from merely being the director or the regulator of Malaysia ‘s upstream sector into a to the full integrated oil and gas production. PETRONAS have been ranked among the FORTUNE Global 500A® the largest corporations in the universe. Since it was invested PETRONAS has grown to be an international oil and gas company with concern involvements in 31 states. As of the terminal of March 2005, the Petronas Group comprised 103 wholly-owned subordinates, 19 partly-owned outfits and 57 associated companies. Together, these companies make the Petronas Group, which is involved in assorted oil and gas based activities. The Group is engaged in a broad spectrum of crude oil activities, including upstream geographic expedition and production of oil and gas to downstream oil refinement ; selling and distribution of crude oil merchandises ; trading, gas processing and liquefaction, gas transmittal grapevine web operations, selling of liquified natural gas, petrochemical fabrication and selling, transportation, automotive technology and belongings investing. PETRONAS is making its concern with the major scheme of integrating, adding value and globalisation. Their major aspects of concern integrating are Exploration and Production ; Oil, Gas, Petrochemicals, Logistics and Maritime, Research and Technology and Corporate Sustainability.

The market construction of PETRONAS in this context means how PETRONAS tantrum into the oligopoly market. I will be discoursing the features of an oligopoly market and see how PETRONAS fit the features. Just to recap oligopoly is the market construction that ‘s has few manufacturers that produce same type of goods and replacement with each other. Examples of oligopoly are Oil industry which I believe PETRONAS autumn under this industry, auto industry and coffin nail industry. The market is dominated by a few big manufacturers of a homogeneous or differentiated merchandise.

This essay could be plagiarized. Get your custom essay
“Dirty Pretty Things” Acts of Desperation: The State of Being Desperate
128 writers

ready to help you now

Get original paper

Without paying upfront



Type of the merchandise is standardized or differentiated

Control over monetary value is limited by common mutuality, or it is considerable with collusion

Conditionss of entry has important obstructions

Non-price competition is typically a great trade with merchandise distinction.

The tabular array above clearly shows that so PETRONAS tantrum into the oligopoly market construction as it fulfils most of the oligopoly features.


Petroliam Nasional BerhadA ( PETRONAS ) is 100 % owned by Government of Malaysia via Minister of Finance ( Inc. ) .


Petronas have gained alone accomplishment and proficiency in state edifice and this, together with their proficient and operational competences have allowed it to be progressively accepted as the preferable strategic spouse by international companies and the fold states where Petronas operate. This truly suggests that Petronas is recognizing their vision of going a “ Leading Oil and Gas Multinational of Choice ” . Petronas has transformed from a domestic-based national oil company into a to the full integrated oil and gas transnational corporation and as a corporation it has experienced important mileposts. Below are merely some of the high spots of the different old ages.




Signed a joint grant understanding for the North Sidi Kirir Deep offshore geographic expedition block in the Nile Delta, Egypt.


Increased its equity retention in the APA Group to go the individual largest stockholder in one of Australia ‘s biggest energy transmittal and Distribution Company.


Signed the chief rules towards a new PSC with ExxonMobil Exploration and Production Malaysia Inc and PETRONAS Carigali Sdn Bhd that would let the two PSC spouses to go on their upstream engagement in seven oil Fieldss offshore Peninsular Malaysia.


PETRONAS Dagangan Berhad marked its first biodiesel ( B5 ) bringing to Ministry of Defense ( MINDEF ) and Dewan Bandaraya Kuala Lumpur ( DBKL ) , an enterprise in support of the Malayan Biofuel Industry Act 2007.

PETRONAS Australia Pty Ltd increased its equity keeping to 17.23 % in the APA Group, doing it the individual largest stockholder in Australia ‘s taking gas transmittal and Distribution Company.

( Table 1: accomplishments of Petronas between 2006 and 2009, beginning: )

What can be concluded from the above tabular array is that PETRONAS is traveling topographic points ; its market is turning enormously and there is no uncertainty that it is non shriveling. PETRONAS have expanded its market to over 30 states around the universe. It has been accepted as the strategic spouses by those states that they are developing their crude oil industry.


Today we live in a universe that is controlled by engineering. Almost everything that is done there should be engineering included in the procedure. Petronas every bit good is significantly being affected by the technological alterations that are presently go oning worldwide. Looking upon the globalisation patterns that PETRONAS are presently set abouting, engineering is impacting this whole procedure of the organisation. When Petronas is bring forthing utilizing engineering, production will be more efficient and that will ensue in supply being increased. That means due to the progress in engineering the supply curve for PETRONAS will increase.

Monetary value

P 2

P 1

Q 2


Quantity supplied

Diagram 1: how technological alterations affect the supply of Petronas

However, engineering is non the lone factor of production bing in the manufacturer ‘s works. There exist more complex interrelatednesss between these factors to be able to work the improved efficiency of one. The most important of all is regulating human resources. Without proper counsel from the leaders of a house, production efficiency will non keep because of opposition, de-motivation or merely a apparent technological ignorance. Technology is non 100 % automated and human intercession every bit good as mistakes is inevitable. Furthermore, engineering may besides be intended for a specific section of the industry, say, big corporations. As such, aggregative supply may non needfully increase because little enterprisers who can non afford to purchase the engineering can non lend in increasing supply.


PETRONAS merely like any company it needs to pull its concern to its possible clients so as such there are certain advertisement ways that they use to make out to its clients and the state as a whole. The advertisement scheme that PETRONAS has used is a bosom strings commercials, ( which of class is publicizing utilizing the telecasting as the type of media ) , this means that PETRONAS has used commercials that frequently create an emotional atmosphere that draws you to the advertizement and makes you experience great and or so sad. Normally people are more attracted by merchandises that make them experience good or even sad in some instances. PETRONAS has used one of its commercial the PETRONAS Advertisement: Raya 2006 that has touched so many and the picture was uploaded on you tube. Even people who watch a batch of PETRONAS advertizements have said that they enjoy watching them and they are ever eager for the new advertizements. Petronas besides make commercials for every festival that are ever go oning in Malaysia illustration could be of the 49thA MerdekaA Day. The other manner that PETRONAS usage to advertise is through hoardings and newspapers. For hoardings as you drive along the route you will happen immense boards publicizing PETRONAS and by such person can come to cognize about PETRONAS through this manner.


Petronas is join forcesing with some markets and this makes PETRONAS more popular among other markets that they are interacting with.


PETRONAS recognize the value of instruction and it believes that it can develop human capableness through instruction. As such Petronas is join forcesing with the instruction sector in the signifier of presenting sponsorship loans to local and international pupils. The Petronas unit that is responsible for managing instruction affairs is called the Education Sponsorship Unit. The sponsorship is in the signifier of exchangeable loan. Based on the academic consequences, co-curricular activities, the household back land and the appraisal of the pupil ‘s personality PETRONAS merely do n’t give out sponsorship but it has standards that pupils should run into. PETRONAS has 6 homo and capital development plans in Malaysia and abroad. These plans are

Educational & A ; Training Institutions: In this plan Petronas provide first educational and preparation services to people and the state through the assorted establishments they have established such as University Technology PETRONAS ( UTP ) , Academy Laut Malaysia, ( ALAM ) PETRONAS Management Sdn Bhd ( PERMATA ) and Institute Technology Petroleum PETRONAS ( INSTEP ) .

Education Sponsorship Unit: This is the unit that is responsible for managing instruction affairs.

PETRONAS e-learning: command the latest information and communicating engineering ( ICT ) to supply on-line preparation and development plans for Petronas employees. It besides offers a broad scope of online acquisition stuffs, on-line classs every bit good as services including eLearning courseware and portal development, designed for professionals.

Petrosains: This synergistic Science Discovery Centre that encourages the Malayan populace to larn more about scientific discipline, and research the infinite possibilities it offers.

Schools Outreach: this is a plan where PETRONAS outreach for certain schools and invests a considerable attempt and resources into education-based outreach activities to animate and develop the community.

Industrial Training: this is the plan in which PETRONAS grant pupils chances to partake structured Industrial preparation.

Students that have awarded the sponsorship after they finish their third surveies have their exchangeable loans converted into full scholarship. These pupils have a binding contract with Petronas that after they finish school they work for the company for two old ages and for every twelvemonth they are sponsored.


Petronas was one of the chief patrons of the BMW Sauber expression one squad and it provides fuel and lubricator to the squad. Recently last twelvemonth it was confirmed that it was traveling from BMW to the newly-formed Mercedes Grand Prix. Besides it is the chief patron of the Malayan Grand Prix and the co-sponsors of the Chinese Grand Prix. As portion of its corporate societal duty plan, Petronas besides brings underprivileged kids to watch the race.



PETRONAS is a company which falls under the oligopoly type of market constructions. Wholly owned by the authorities, PETRONAS is the state ‘s one of the company that provide crude oil and gas for the state. PETRONAS from its old old ages it has been turning countrywide and world-wide as it has some of its merchandises being used in other states even outside Asia and every bit far as Egypt in Africa. It is doing a whole batch of net incomes from its merchandises and as such the state benefits a batch from it. PETRONAS does non merely attention for the production of crude oil and gas but besides collaborate with other markets such as instruction and supply sponsorship loans to those pupils which need them. PETRONAS besides have established assorted establishments as their chief purpose is to enrich the state with quality instruction. PETRONAS besides participate in somehow amusement market as it is one of the chief patrons of the newly-formed Mercedes Grand Prix and besides chief patron of the Malayan Grand Prix.


As PETRONAS is entirely owned by the authorities and it has been the company that the authorities has been concentrating on, I recommend that it unify with other energy company which is Tenaga Nasional Berhad. If the authorities for the following decennary focuses on Biomass, PETRONAS should unify with companies such as Sime Derby which was recognized as the biomass title-holder, as I believe this attempt coupled with reengineering engineering, will harvest a sustainable company that will hold a good impact for both energy and nutrient sector in Malaysia.

Cite this page

The Brief History and Background of Petronas. (2017, Jul 05). Retrieved from

Remember! This essay was written by a student

You can get a custom paper by one of our expert writers

Order custom paper Without paying upfront