The Brief History and Background of Petronas

The Brief History and Background of PetronasPetronas is an acronym for Petroliam Nasional Berhad. It was established in 17 August 1974 as the field oil company for Malaysia. Petronas which is wholly owned by the government it is the corporation which is vested with the entire oil and bluster resources in Malaysia and is entrusted with the responsibility of developing and adding value to these resources. Petronas has with child(p) from just cosmos the manager or the regulator of Malaysias upstream sector into a fully integrated oil and gas production. PETRONAS set out been ranked among the sight Global 500 the sizeablest corporations in the world. Since it was invested PETRONAS has grown to be an inter field of study oil and gas company with duty interests in 31 countries. As of the end of work 2005, the Petronas Group comprised 103 wholly-owned subsidiaries, 19 carve uply-owned outfits and 57 associated companies. Together, these companies make the Petronas Group, which is involved in various oil and gas based activities. The Group is engaged in a massive spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining marketing and distribution of petroleum products trading, gas processing and liquefaction, gas transmission pipeline network operations, marketing of liquefied natural gas, petrochemical manufacturing and marketing, shipping, automotive engineering and property investment. PETRONAS is doing its business with the major strategy of integration, adding value and globalization. Their major facets of business integration atomic number 18 Exploration and Production Oil, Gas, Petrochemicals, Logistics and Maritime, Research and Technology and Corporate Sustainability.The market structure of PETRONAS in this context means how PETRONAS fit into the oligopoly market. I go forth be discussing the characteristics of an oligopoly market and see how PETRONAS match the characteristics. Just t o recap oligopoly is the market structure thats has few producers that produce same type of goods and substitute with each other. Examples of oligopoly argon Oil industry which I believe PETRONAS fall under this industry, car industry and cig arette industry. The market is dominated by a few large producers of a homogenous or differentiated product.CHARACTERISTICS OF OLIGOPOLYPETRONASType of the product is standardized or differentiatedControl over price is limited by joint interdependence, or it is considerable with collusionConditions of entry has significant obstaclesNon-price competition is typically a great deal with product differentiation.The table supra clearly shows that hence PETRONAS fit into the oligopoly market structure as it fulfils most of the oligopoly characteristics.THE MAJOR PLAYERS OF PETRONASPetroliam Nasional Berhad(PETRONAS) is 100% owned by Government of Malaysia via Minister of Finance (Inc.).THE CURRENT TRENDS OF PETRONASPetronas have gained quaint skil l and proficiency in nation building and this, together with their technical and operational competencies have allowed it to be increasingly accepted as the preferred strategic partner by international companies and the congregation countries where Petronas operate. This really suggests that Petronas is realizing their vision of becoming a Leading Oil and Gas Multinational of Choice. Petronas has transformed from a domestic-based national oil company into a fully integrated oil and gas multinational corporation and as a corporation it has experienced significant milestones. on a lower floor are just some of the highlights of the different years.YearAchievements2006gestural a joint concession agreement for the North Sidi Kirir Deep onshore exploration hinder in the Nile Delta, Egypt.2007Increased its equity holding in the APA Group to become the single largest shareholder in one of Australias biggest energy transmission and Distribution Company.2008Signed the main principles toward s a new PSC with ExxonMobil Exploration and Production Malaysia Inc and PETRONAS Carigali Sdn Bhd that would allow the two PSC partners to continue their upstream participation in s level oil fields offshore Peninsular Malaysia.2009PETRONAS Dagangan Berhad marked its first biodiesel (B5) delivery to Ministry of Defense (MINDEF) and Dewan Bandaraya Kuala Lumpur (DBKL), an initiative in support of the Malaysian Biofuel Industry Act 2007.PETRONAS Australia Pty Ltd increased its equity holding to 17.23% in the APA Group, making it the single largest shareholder in Australias leading gas transmission and Distribution Company.(Table 1 achievements of Petronas between 2006 and 2009, source www.petronas.com )What can be concluded from the above table is that PETRONAS is going places its market is growing tremendously and there is no doubt that it is not shrinking. PETRONAS have expanded its market to over 30 countries just about the world. It has been accepted as the strategic partners by those countries that they are developing their petroleum industry.HOW DOES TECHNOLOGY AFFECT PETRONASToday we live in a world that is controlled by technology. Almost everything that is done there should be technology included in the process. Petronas as salubrious is significantly being affected by the technological changes that are currently happening worldwide. Looking upon the globalization practices that PETRONAS are currently undertaking, technology is affecting this whole process of the organization. When Petronas is producing using technology, production will be to a greater extent(prenominal) efficient and that will result in supply being increased. That means due to the advance in technology the supply curve for PETRONAS will increase. priceP 2P 1Q 2Q1Quantity suppliedDiagram 1 how technological changes affect the supply of PetronasHowever, technology is not the only means of production existing in the producers plant. There exist more complex interrelationships between these factors to be able to exploit the improved efficiency of one. The most all-important(a) of all is governing human resources. Without proper guidance from the leaders of a firm, production efficiency will not hold because of resistance, de-motivation or just a plain technological ignorance. Technology is not 100% automated and human intervention as well as errors is inevitable. Moreover, technology may in any case be intended for a specific segment of the industry, say, large corporations. As such, aggregate supply may not necessarily increase because small entrepreneurs who cannot afford to get the technology cannot contribute in increasing supply.PETRONAS ADVERTISING STRATERGIESPETRONAS just like any company it needs to draw its business to its potential customers so as such there are certain advertising ways that they use to reach out to its customers and the country as a whole. The advertising strategy that PETRONAS has use is a heart strings commercials, (which of cou rse is advertising using the television as the type of media), this means that PETRONAS has used commercials that often create an emotional standard atmosphere that draws you to the advertisement and makes you feel great and or so sad. Normally people are more attracted by products that make them feel good or even sad in some cases. PETRONAS has used one of its commercial the PETRONAS Advertisement Raya 2006 that has touched so many and the video was uploaded on you tube. Even people who put one across a lot of PETRONAS advertisements have said that they enjoy watching them and they are always eager for the new advertisements. Petronas also make commercials for every festival that are always happening in Malaysia example could be of the 49thMerdekaDay. The other way that PETRONAS use to advertise is through billboards and newspapers. For billboards as you drive along the channel you will find huge boards advertising PETRONAS and by such somebody can come to know about PETRONAS th rough this way.COLLABORATIONS WITH OTHER MARKETSPetronas is collaborating with some markets and this makes PETRONAS more popular among other markets that they are interacting with.EDUCATIONPETRONAS recognize the value of reproduction and it believes that it can develop human capability through preparation. As such Petronas is collaborating with the education sector in the form of awarding sponsorship loans to local and international students. The Petronas unit that is responsible for handling education matters is called the Education Sponsorship Unit. The sponsorship is in the form of convertible loan. found on the academic results, co-curricular activities, the family back ground and the assessment of the students personality PETRONAS just dont give out sponsorship but it has criteria that students should meet. PETRONAS has 6 human and capital development programs in Malaysia and abroad. These programs areEducational Training Institutions In this program Petronas provide world- class educational and training services to people and the nation through the various institutions 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 handling education matters.PETRONAS e-learning control the latest information and communication technology (ICT) to provide online training and development programs for Petronas employees. It also offers a wide range of online learning materials, online courses as well as services including eLearning courseware and portal development, designed for professionals.Petrosains This interactive Science Discovery Centre that encourages the Malaysian public to learn more about science, and explore the eternal possibilities it offers.Schools Outreach this is a program where PETRONAS outreach for certain schools and invests a considerable effo rt and resources into education-based outreach activities to inspire and develop the community.Industrial Training this is the program in which PETRONAS grant students opportunities to partake coordinate Industrial training.Students that have awarded the sponsorship after they shade their tertiary studies have their convertible loans converted into full scholarship. These students have a binding contract with Petronas that after they finish school they work for the company for two years and for every year they are sponsored.MOTORSPORTPetronas was one of the main sponsors of the BMW Sauber formula one team and it provides fuel and lubricator to the team. Lately last year it was confirmed that it was moving from BMW to the newly-formed Mercedes Grand Prix. Also it is the main sponsor of the Malaysian Grand Prix and the co-sponsors of the Chinese Grand Prix. As part of its corporate social responsibility program, Petronas also brings underprivileged children to watch the race.CONCLU SION AND RECOMMENDATIONSCONCLUSIONPETRONAS is a company which falls under the oligopoly type of market structures. wholly owned by the government, PETRONAS is the countrys one of the company that provide petroleum and gas for the country. PETRONAS from its previous years it has been growing nationwide and worldwide as it has some of its products being used in other countries even outside Asia and as far as Egypt in Africa. It is making a whole lot of profits from its products and as such the country benefits a lot from it. PETRONAS does not only care for the production of petroleum and gas but also collaborate with other markets such as education and provide sponsorship loans to those students which need them. PETRONAS also have established various institutions as their main aim is to enrich the nation with quality education. PETRONAS also participate in somehow entertainment market as it is one of the main sponsors of the newly-formed Mercedes Grand Prix and also main sponsor of t he Malaysian Grand Prix.RECOMMENDATIONSAs PETRONAS is wholly owned by the government and it has been the company that the government has been focusing on, I recommend that it merge with other energy company which is Tenaga Nasional Berhad. If the government for the beside decade focuses on Biomass, PETRONAS should merge with companies such as Sime Derby which was recognized as the biomass champion, as I believe this effort coupled with reengineering technology, will draw off a sustainable company that will have a good impact for both energy and food sector in Malaysia.