A Brief History of PETRONAS

Photo by Jens Peterson

The PAT’s major sponsor and booster, the national oil and gas company PETRONAS (short for Petroliam Nasional Berhad) grew out of the political stability of the Malaysian government, and the shifting of power in oil and gas production away from the major oil companies and towards the Organization of Petroleum-Exporting Companies (OPEC).

The first company to mine oil and gas in the territory that is now Malaysia was Royal Dutch Shell (we know it as just “Shell” – a mega-company created from the merger of Shell Oil and Royal Dutch Oil).   Shell began operations in the late 1900s. 

After Malaysia gained independence from the British in the 1960s, several other companies made a play for rights to Malay and Borneo oil reserves, with Esso establishing a long-term presence. 

Meanwhile, the Organisation for Economic Co-operation and Development (OECD) and the International Monetary Fund (IMF) brokered an agreement that consolidated Malaysian territorial and maritime disputes, kicking off five decades of political stability that persist to this day under Malaysia’s National Front party. 

A government-controlled oil company was proposed to consolidate the benefits of Malaysia’s rich oil and gas reserves to benefit the Malaysian people and their government, instead of just taxing, licensing, and regulating the major oil companies, which would provide some revenue but primarily benefit foreign interests.  However, the support of the major oil companies, several of whom already had going concerns in the Malay oil fields, was necessary.  The national oil company PETRONAS was set up, modeled after Indonesia’s Pertamina, to compromise – it would undertake its own mining and drilling activities, while at the same time overseeing, licensing, and taxing the major oil companies who wanted to operate in Malaysia.

PETRONAS expanded their natural gas extraction activities over the 70s and 80s.  In response to an exhaustion of reserves in the 1980s, PETRONAS entered into partnerships for coastal oil drilling in Myanmar and Vietnam.  PETRONAS’ international activities increased rapidly in the 1990s with a dispute between the Malay and Thai governments about offshore drilling rights in the Gulf of Thailand resulted in a joint venture between the two governments to exploit the oil reserves as equal partners.  The company also expanded into ship-ownership in the 1990s, and worked to bolster the independence of the vertical supply chain within Malaysia.  Responding to Malaysia’s history of oppression and colonization, maintaining the independence of and seeing to the prosperity of Malaysian interests.

In the mid-90s, two of the company’s subsidiaries, PETRONAS Dagangan Bhd and PETRONAS Gas Bhd, went public on the Kuala Lumpur Stock Exchange.  The company also purchased the former sub-Saharan branch of Mobile Oil, renaming the company Engen Petroleum. 

In 1998, PETRONAS acquired its iconic new headquarters, the PETRONAS Twin Towers, an instantly-recognizable landmark on the Kuala Lumpur skyline.  Between 1998 and 2004, the structure was the tallest skyscraper in the world (it was surpassed in 2004 by the Burj Khalifa in Dubai).  It is still the largest twin tower structure. 

In 1999, PETRONAS officially sponsored the Kuala Lumpur 4×4 Adventure Team, lead by Halim Rahman, and as such the team was rebranded the Petronas Adventure Team.  The company also sponsored the Malaysian Grand Prix and co-sponsored the Chinese Grand Prix.  Current sponsorships include the PETRONAS TOYOTA TEAM TOMS, the Fiat Yamaha motoGP, and the Mercedes Grand Prix.

The company has continued to diversify and thrive under government stewardship, enhancing Malaysian prosperity.