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PETRONAS SWOT & PESTLE Analysis

ID : 52364853| Jul 2018

COMPANY PROFILE -PETRONAS (Petroliam Nasional Berhad)

Business Sector :Oil & Gas

Operating Geography :Malaysia, Asia

About PETRONAS (Petroliam Nasional Berhad) :

PETRONAS (Petroliam Nasional Berhad) is a wholly Malaysian Government-owned oil and gas company, which was founded on 17thAugust 1974. The company is headquartered in PETRONAS Twin Towers in Kuala Lumpur, Malaysia and it oversees the entire oil and gas resources in Malaysia. It has featured in several national and international rankings and recently PETRONAS was ranked as one of the largest corporations in the world in Fortune Global 500 as of 2017. The company is engaged in several petroleum activities like marketing and distribution of petroleum products, exploration and production of oil and gas, refining of petroleum crude oil and purifying raw natural gas, operating gas transmission pipeline network, automotive engineering, and others. Half of the Malaysian Government budget depends on the Petronas's dividend and hence it is a substantial source of income for the government.

Petronas biggest “Vision Mission” is to become a leading oil and gas multinational of choice. Its core business comprises of oil and gas. The business case analysis of PETRONAS in 2018 predicts a steep rise in the crude oil price, due to significant rise in the air passengers. This will create a major opportunity for Petronas. Its main USP lies in being Asia’s largest Oil and Gas Company which also participates in Motosports Formula 1.The growing demand for energy, inspires and strengthens their business and marketing strategy to steadily drive for new technologies and push boundaries towards a sustainable energy future.

PETRONAS (Petroliam Nasional Berhad) Revenue :


RM223.6 billion – FY ending Dec 31st 2017 (y-o-y growth 15%)
RM195.1 billion USD 46.06 billion – FY ending Dec 31st 2016

Ownership / Major shareholders :

Petronas is wholly owned by the Government of Malaysia. As at 30th April 2018, the shareholding structure of the company is – Petroleum Nasional Bhd (69.86%), Amanahraya Trustees Berhad (8.71%), Foreign Shareholding (9.66%) and Floating Shares (11.77%).

Competitive Analysis of PETRONAS (Petroliam Nasional Berhad)

SWOT
PESTLE

The SWOT analysis report of PETRONASis a framework which helps in analyzing the strengths, weaknesses, opportunities and threats of the company. The Swot/Tows analysis for this oil and gas company in Malaysia provides detailed and precise information related to the internal and external analysis of the company. Petronas Subsidiariesare widely spread across the globe and comprises of wholly- owned 89 subsidiaries and partly- owned 38 subsidiaries, which has given it tremendous scope to expand in the international markets. The scalable business model and its business strategyillustrateshow Petronas is strongly placed amongst the top 3 exporters of the LNG Market. The acquisition of stakes in the LNG import terminal of Indian Oil Corporationis of significant value to PETRONAS and adds to its existing strength.The Petronas Competitive analysis report portrays the rise ofUS as an energy exporter and its dominance in theoil and gas marketwhich poses a major threat to the company. The Internal factor evaluation provided in the PetgasSwot analysis report displays holistic information related to Petronas organizational structure and its strategic management. Investment in cutting-edge technologies to enhance its business in oil and gas value chain through its research proves amajor opportunity for the Petgas Company. The company is all set to enter in collaboration through its UK subsidiary Petgas Trading Limited with Gazprom Marketing & Trading Limited which will put the conglomerate on a high growth trajectory.

Strengths
Weaknesses
1. One of the strongest brand names to be present in several renowned International Auto Racing events
2. Operations in diversified breadth across supply chain
3. Strong foothold in LNG market and its investments initiatives
4. New research initiatives in developing advanced capabilities
1. Fatal accidents at various sites
2. Selloff of oil and gas assets in Alberta and cancellation of B.C. LNG project
Opportunities
Threats
1. Increase in crude oil prices expected
2. Increasing demand for oil and natural gas
1. The rise of US as an energy exporter
2. Increase in the number of EVs may cause next oil crisis
3. PETRONAS asked to exit operations in Myanmar due to Rohingya Crisis
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Detailed SWOT Analysis of PETRONAS (Petroliam Nasional Berhad)

 

Strength

1. One of the strongest brand names to be present in several renowned International Auto Racing events: PETRONAS has been one of the main sponsors in several high-class global Auto Racing events. PETRONAS sponsored BMW Sauber Formula One team along with many other important sponsors like Intel, and it was a supplier of fuel and lubricants to the team. It later moved from BMW Sauber to the Mercedes Grand Prix Team. PETRONAS was also one of the sponsors of the Malaysian Club Prix races and in recent times, was a major sponsor of PETRONAS TOYOTA TEAM TOM’S which participated in SUPER GT Series. In 2010, the company was the major sponsor of Mercedes Grand Prix team which won the F1 Constructors’ Championship, 4th time in a row in 2017 Formula One Season. The company also boasts three consecutive wins in Formula One’s World Constructors’ Championship due to its brand-new range of customized lubricants and fuels. It developed Syntium engine oil, Primax fuels and Tutela energy recovery system cooling fluid in 2010, 2011, 2015 respectively, as part of its PETRONASFluid Technology Solutions. All these sponsorship activities have made PETRONAS one of the globally renowned brand names.

2. Operations in diversified breadth across supply chain: PETRONAS operates in oil and gas exploration and production to refining oil, a processing gas, and its liquefaction, operating gas transmission pipeline network and many more. It also engages in manufacturing, marketing, shipping and investment in petrochemicals. The company operates in 43 countries in the world through its five business divisions which are petrochemicals, oil business, gas business, logistics and maritime, and exploration and production. The diversified operations across various geographic locations have helped it minimize risk in any particular country.

3. Strong foothold in LNG market and its investment initiatives: PETRONAS is strongly placed among top 3 exporters of LNG market, which has been one of the fastest growing markets. Leveraging on its strength, the company has bought stakes in Cairn India and Rosneft of Russia. Recently, the company is looking to invest in a gas pipeline to market Canadian gas assets from Western Canada to rest of Canada and North America. PETRONAS is also planning to buy a stake in LNG import terminal of Indian Oil Corporation which has an output of 5 million tonnes every year, to sell its global portfolio of LNG there. All these investment initiatives by the company add to its existing strength.

4. New research initiatives in developing advanced capabilities: PETRONAS invests in cutting-edge technologies to enhance its business in oil and gas value chain through its research. The company made advances in exploration technology, enhanced oil recovery (EOR), wells and facilities technology, sustainability gas, advanced materials, base oil lubricants and fuel, and Petrochemical Derivatives and Specialty Chemicals. It developed internally developed exploration tools for complex geography and fiber optics DAS Technology which optimized their Capital Expenditure. The company’s UK subsidiary Petgas Trading Limited has also planned collaborative ventures with Gazprom Marketing & Trading Limited. PETRONAS is also planning to buy stakes in Cairn India, Rosneft and LNG import terminal of IOC.

Weakness

This section is available only in the 'Complete Report' on purchase.

Opportunity

1. Increase in crude oil prices expected: Crude oil prices can rise globally as air passenger demand has increased by 7.6% in 2017, according to International Air Transport Association. As air carriers use jet fuel and the other fuel alternatives are not cost-effective, the fuel for increasing air traffic will be sourced from a middle distillate of crude oil. As a result, jet fuel consumption is expected to increase 64% from 2017 to 2050, according to EIA in its Annual Energy Outlook 2018. This rising crude oil prices can translate into more profit for PETRONAS.

2. Increasing demand for oil and natural gas: Strong economic growth of developing countries might be one of the drivers of global and natural gas demand and it is expected to increase by 1.6% annually by 2030.Due to increasing demand for electricity, demand for natural gas is also expected to increase by 1.7% annually by 2030. The company is in agood position to take advantage of increasing demand for liquid fuels and natural gas and thus strengthen its financials.

Threat

This section is available only in the 'Complete Report' on purchase.

Major Competitors :

  • Exxon Mobil
  • BP
  • Petrobras
  • ConocoPhillips
  • Marathon Oil
  • Chevron
  • Valero
  • Total
  • Shell
  • Pemex

Major Brands :

  • Petronas Lubricants International Sdn Bhd (PLI)
  • Petronas Sprinta
  • Petronas Carigali Sdn Bhd
  • E&P O&M Services Sdn Bhd
  • Petronas Carigali Overseas Sdn Bhd
  • Petronas Research Sdn Bhd
  • MITCO Sdn Bhd
  • Petronas Methankol (Labuan) Sdn Bhd (PMLSB)
  • Petronas Dangangan Berhad
  • Petronas Gas Berhad
  • MISC Berhad
  • KLCC Berhad
  • Petronas Chemicals
  • Malaysian Marine and Heavy Engineering
  • Petronas Syntium
  • Petronas Syntium Moto
  • Petronas Urania
  • Petronas Paraflu
  • Petronas Tutela
  • Petronas Arbor
  • Petronas Akros
  • Petronas Durance
  • Petronas Fertiliser Kedah

Key Business Segments / Diversification :

PETRONAS (Petroliam Nasional Berhad)
Crude Oil & Natural Gas Petrochemicals Construction Solvents and Lubricants Coatings
Packaging personal Care Pharmaceutical Textile Transportation
Home and Office Products

Recent Acquisition / Mergers / Alliance / Joint Ventures / Divestitures :

Name
Business Segment
Year
Type
Objective/Synergy Achieved
LNG CanadaLNG and Natural GasUnderwayAcquisition (25% stake)This will grow Petronas’ global market of LNG and natural gas
Gomeju Oil EthiopiaOil Company2018PartnershipEnabled Gomeju Oil to promote and distribute Petronas products in Ethiopia
Edra Global Energy BhdPower producer2015AcquisitionPetronas' acquisition of gas-related assets in Azerbaijan is the second largest merger and acquisition (M&A) deal in Malaysia in 2015. The total cost of the transaction was $2.3 billion. Petronas closed the transaction which involved the transfer of Statoil's 15.5 percent participating interest in the Shah Deniz production sharing agreement, 15.5 percent share in the South Caucasus Pipeline Company (SCPC), and 12.4 percent share in the Azerbaijan Gas Supply Company (AGSC).
Source: Company website and other reliable sources. The detailed table is available in the Complete Report.
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WHY BUY THIS REPORT?
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
The PETRONAS Swot and Pestle Analysis report will offer the following:
  • Petronas case study which gives us insights related to its business model and the how it handles its competition.
  • A brief history about PETRONAS company profile, ownership, key business segments, earnings and revenue and organizational structure.
  • External analysis of PETRONAS depicting its opportunities and threats.
  • Internal analysis giving insight of the strengths and weakness pertaining to PETRONAS.
  • Gain a good understanding related to the key influencers such as political, environmental, legal and technological factors affecting the Malaysian oil and gas industry.
  • Knowledge pertaining to PETRONAS corporate structure and marketing structure.
  • A peek into the company’s acquisition, mergers, alliances, joint ventures and collaborations.
  • The current trends combing the oil and gas industry in Malaysia and Petronas in particular.
  • Study of the business case for Petgas with highlights into its business strategy and marketing strategy.
References used in PETRONAS (Petroliam Nasional Berhad) Analysis Report

1. http://www.petronas.com.my/investor-relations/Documents/annual-report/PETRONASAnnualReport2016.pdf

2. www.petronas.com.my/

3. http://www.petronas.com.my/our-business/Pages/default.aspx

Copyrights and Disclaimer

PETRONAS SWOT and PESTLE analysis has been conducted by Subhadeep Chakraborty and reviewed by senior analysts from Barakaat Consulting.

Copyright of PETRONAS SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.

PETRONAS SWOT & PESTLE Analysis
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