Petroliam Nasional Berhad (Petronas)

Petroliam Nasional Berhad (Petronas)
Name	Petroliam Nasional Berhad (Petronas)
Type	State-owned enterprise
Industry	Petroleum, petrochemicals, natural gas
Founded	17 August 1974
Founder	Tun Abdul Razak
Headquarters	Kuala Lumpur, Malaysia
Key people	Tengku Muhammad Taufik (President and Group CEO)
Products	Crude oil, natural gas, liquefied natural gas, petrochemicals, refined products
Revenue	(2023)
Num employees	(2023)

Petroliam Nasional Berhad (Petronas) is the Malaysian national oil company founded in 1974 to manage Malaysia's hydrocarbon resources and develop downstream industries. It functions as a commercially oriented enterprise with extensive upstream and downstream operations, a major player in the global petroleum industry and a contributor to national revenues linked to Ministry of Finance (Malaysia), Prime Minister of Malaysia, and federal policy. The company participates in exploration and production across Asia, Africa, the Americas and the Middle East through portfolios involving liquefied natural gas, refining, petrochemicals, and gas-to-liquids projects.

History

Petronas was established by the Petroleum Development Act 1974 under the administration of Tun Abdul Razak and rapid early growth was shaped by concessions previously held by Royal Dutch Shell, Esso, BP, and Texaco. During the 1970s and 1980s Petronas expanded through partnerships with national oil companies such as Pertamina and Brunei Shell Petroleum, and through regional projects involving Sultanate of Brunei, Thailand, and Vietnam. In the 1990s and 2000s the corporation pursued vertical integration with investments in Petronas Towers's financing, the establishment of Petronas Chemicals Group, and participation in global ventures alongside ExxonMobil, Chevron, TotalEnergies, and Rosneft. Major milestones include entry into LNG markets via projects with QatarEnergy, development of the Shah Alam refinery complex, and strategic asset swaps influenced by energy price cycles such as the 2014 oil price crash.

Corporate structure and governance

Petronas is a wholly owned entity under the Ministry of Finance (Malaysia), with a board reporting to the Prime Minister of Malaysia and oversight shaped by statutes such as the Petroleum Development Act 1974. Its governance framework features a board of directors, executive management, and subsidiaries including Petronas Chemicals Group, Petronas Dagangan Berhad, and Petronas Carigali. Corporate governance debates have involved institutions like the Securities Commission Malaysia, Bursa Malaysia, and international standards promulgated by International Finance Corporation and Organisation for Economic Co-operation and Development. Senior appointments have historically linked to political officeholders such as Tun Dr Mahathir Mohamad and corporate figures with experience at Royal Dutch Shell or ExxonMobil.

Operations and business segments

Petronas' business spans upstream exploration and production, midstream transportation and storage, and downstream refining and petrochemicals. Upstream activities engage seismic acquisition, drilling and reservoir management alongside operators like Petronas Carigali and partners including ConocoPhillips, Eni, Repsol, and Ithaca Energy. Midstream operations encompass LNG liquefaction trains, pipeline systems, and regasification terminals linked to projects with Pengerang Integrated Complex and export routes to Japan, South Korea, China, and India. Downstream assets include refineries, lubricant plants, and petrochemical complexes producing polymers and chemicals marketed through networks in Singapore, Netherlands, and United Arab Emirates. Technology and engineering support is provided by in-house units and contractors such as Aker Solutions, McDermott International, and Sapura Energy.

Financial performance and statistics

Petronas has historically been a major contributor to Malaysian federal revenue and foreign exchange earnings, with fiscal transfers managed with the Ministry of Finance (Malaysia) and affected by global benchmarks like Brent crude oil price and Henry Hub. Financial metrics have fluctuated with commodity cycles, producing significant profits in high-price periods and exercising balance-sheet adjustments during downturns such as following the 2014 oil price crash and the COVID-19 pandemic. Public financial scrutiny involves audits, annual reports submitted to stakeholders including Bursa Malaysia-listed subsidiaries, and credit ratings evaluated by agencies like Standard & Poor's, Moody's, and Fitch Ratings.

International activities and joint ventures

Petronas operates internationally through joint ventures, production sharing contracts, and equity stakes in projects across continents, collaborating with entities such as Shell plc, BP, Chevron, TotalEnergies SE, Rosneft, Pertamina, and Sonatrach. Notable foreign ventures include upstream investments in Canada's oil sands, LNG partnerships in Australia and Qatar, and exploration blocks in Gabon, Mozambique, Turkmenistan, and Russia. Strategic alliances have involved technology transfer and financing arrangements with institutions like the Asian Development Bank and export credit agencies from Japan and Export–Import Bank of the United States counterparties.

Corporate social responsibility and sustainability

Petronas runs programmes in education, community development, and environmental stewardship partnering with Universiti Malaya, International Islamic University Malaysia, United Nations Development Programme, and World Wildlife Fund. Initiatives include scholarships, STEM outreach, biodiversity conservation projects in Borneo and Sabah, and investments in low-carbon technologies such as carbon capture and storage pilot projects and renewable energy ventures. Sustainability reporting aligns with frameworks from the Task Force on Climate-related Financial Disclosures and initiatives by International Energy Agency recommendations, while corporate philanthropy coordinates with NGOs like Mercy Malaysia.

Controversies and legal issues

Petronas has been involved in disputes and controversies including disagreements over revenue sharing with state governments such as Sarawak and Sabah, legal challenges related to taxation and royalties brought before the Federal Court of Malaysia, and international litigation concerning joint venture terms with companies like Shell and ConocoPhillips. Environmental and human-rights concerns have arisen in connection with projects affecting communities in Borneo, Mozambique, and oil sands operations in Canada, drawing scrutiny from organizations such as Amnesty International and Greenpeace. Allegations of governance lapses and high-profile cases have prompted parliamentary inquiries in Malaysia and reforms advocated by institutions including the World Bank and Transparency International.

Category:National oil and gas companies Category:Companies of Malaysia Category:Petroleum industry