general . not to be confused with the brazilian oil company petrobras . this article needs additional citations for verification . please help improve this article by adding citations to reliable sources . unsourced material may be challenged and removed . may 2009 learn how and when to remove this template message petrolium nasional berhad petronas the new and current petronas logo which resembles to the previous logo introduced in 2013 type government owned corporation industry oil and gas founded 17 august 1974 ; 42 years ago 1974 08 17 headquarters kuala lumpur malaysia area served malaysia key people wan zulkiflee wan ariffin president 1 tan sri mohd sidek hassan ceo products petroleum natural gas petrochemicals services shipping services revenue us 100.744 billion 2014 2 net income us 21.91 billion 2012 total assets us 161.472 billion 2014 2 total equity us 89.29 billion 2012 owner malaysian government number of employees 51.000 2016 3 website www.petronas.com.my petronas short for petroliam nasional berhad malaysian national oil company inc. is a malaysian oil and gas company that was founded on 17 august 1974 . wholly owned by the government of malaysia the corporation is vested with the entire oil and gas resources in malaysia and is entrusted with the responsibility of developing and adding value to these resources . petronas is ranked among fortune global 500 s largest corporations in the world . fortune ranks petronas as the 75th largest company in the world in 2013 . it also ranks petronas as the 12th most profitable company in the world and the most profitable in asia . 4 5 6 since its incorporation petronas has grown to be an integrated international oil and gas company with business interests in 35 countries . as of the end of march 2005 the petronas group comprised 103 wholly owned subsidiaries 19 partly owned outfits and 57 associated companies . together these companies make the petronas group which is involved in various oil and gas based activities . the financial times has identified petronas as one of the new seven sisters 7 the most influential and mainly state owned national oil and gas companies from countries outside the oecd . the group is engaged in a wide 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 provides a substantial source of income for the malaysian government with 45 % of the government s budget dependent on petronas dividend moreover in 2011 government actual balance has 5 percent deficit of gross domestic product . 8 the company is headquartered at the petronas towers which was officially opened on malaysia s 42nd national day 31 august 1998 in the corporation s 24th anniversary year . on 26 february 2015 petronas cut its 2015 capital expenditures budget after reporting a 2 billion fourth quarter loss the company s first loss since it began reporting quarterly results five years ago . 9 contents 1 history 1.1 setting up a state oil and gas company 1970s 1.2 developing natural gas the late 1970s to the mid 1980s 1.3 battling oil depletion the late 1980s 1.4 expanding globally the 1990s and beyond 2 corporate logo 2.1 logo concept 2.2 refreshed logo 3 subsidiaries 3.1 petronas dagangan berhad 3.2 petronas gas berhad 3.3 misc berhad 3.4 klcc properties berhad 3.5 petronas chemicals 3.6 malaysian marine and heavy engineering 3.7 other principal subsidiaries 4 motorsport 5 education 6 see also 7 references 8 external links history edit this section does not cite any sources . please help improve this section by adding citations to reliable sources . unsourced material may be challenged and removed . may 2009 learn how and when to remove this template message petronas was not the first company to extract oil or gas in malaysia . it was royal dutch shell that began the oil exploration in sarawak then under the white rajahs at the end of the 19th century . in 1910 the first oil well was drilled in miri sarawak . this became the first oil producing well known as the grand old lady . shell was still the only oil company in the area in 1963 when the federation of malaya having achieved independence from britain six years before united with sarawak and sabah both on the island of borneo and became malaysia . the authorities in the two new states retained their links with royal dutch shell which brought malaysia s first offshore oil field onstream in 1968 . meanwhile the federal government turned to esso continental oil and mobil licensing exploration off the state of terengganu in the malay peninsula the most populous region and the focus of federal power . by 1974 however only esso was still in the area . it made its first discoveries of natural gas in that year and then rapidly made terengganu a bigger producer of oil than either sarawak or sabah . by 1974 malaysia s output of crude oil stood at about 81 000 barrels per day 12 900 m3 d . setting up a state oil and gas company 1970s edit several factors converged in the early 1970s to prompt the malaysian government into setting up a state oil and gas company as first proposed in its five year plan published in 1971 . former chief minister of sarawak tun abdul rahman ya kub was one of the people who proposed the idea of malaysia setting up their own oil company . 10 these were years in which power in the world oil industry began to shift away from the majors which then controlled more than 90 % of the oil trade toward the organisation of petroleum exporting countries opec as well as a proliferation of new private and state companies joining in the search for reserves . by 1985 the majors reduced in number from seven to five were producing less than 20 % of the world total . it seemed that malaysia would either have to join the trend or continue to leave its oil and gas entirely to royal dutch shell and esso multinational corporations necessarily attuned to the requirements of their directors and shareholders rather than to the priorities the government of a developing country might seek to realise . further an agreement between malaysia and indonesia signed in 1969 had settled doubts and disputes about each country s claims over territorial waters and offshore resources at a time when both were heavily indebted to organisation for economic co operation and development oecd governments and banks as well as to the international monetary fund imf and the world bank . setting up a state oil and gas company through which the government could get international capital but avoid tangling with foreign oil companies or governments had worked for indonesia why not for malaysia as well the oil crisis of 1973 74 made the government even more aware of malaysia s dependence on foreign oil and foreign capital in general . another factor in the decision was that the technology had recently been developed for extensive exploration and drilling offshore . the local geography included a combination of broad basins of sedimentary rock with calm and shallow waters around the sunda shelf making exploration for gas and oil relatively easier and more successful than in most areas of the world . malaysian crude turned out to be mostly high quality with low sulphur content . a final and crucial factor in the creation of petronas and its continuation in much the same form since has been the political stability of malaysia . since the restoration of parliament in 1971 the country has been ruled by the national front barisan nasional the heirs to the alliance party which had been dominant from 1957 to 1969 and the originators in 1971 of the new economic policy which was designed to improve the economic position of bumiputras native malays and other natives in sabah and sarawak relative to chinese and indian malaysians and to foreign corporations . the difficulties this policy has caused for foreign companies and investors are outweighed by the benefits they believe they gain from malaysia s political stability . the malaysian government chose to create a state company rather than using taxes production limits leasing or other familiar instruments of supervision . the government wanted and needed the co operation of the majors but also sought to assert national rights over the use of the country s resources . a state company having both supervisory powers over the majors and production activities of its own was a workable compromise between allowing the majors full rein and excluding them along with their capital and expertise altogether . petronas was established in august 1974 and operates under the terms of the petroleum development act passed in october 1974 . it was modelled on pertamina the indonesian state oil and gas company founded in 1971 in succession to permina which had been set up in 1958 . according to the 1971 plan petronas goals would be to safeguard national sovereignty over oil and gas reserves to plan for both present and future national need for oil and gas to take part in distributing and marketing petroleum and petrochemical products at reasonable prices to encourage provision of plant equipment and services by malaysian companies to produce nitrogenous fertilisers and to spread the benefits of the petroleum industry throughout the nation . on 6 september 1974 malaysia s then prime minister tun abdul razak announced the appointment of tengku razaleigh hamzah as chairman and chief executive of petronas . tun razak said from among the new blood i intended to bring tengku razaleigh into the cabinet . however i have an important job for him a job as important as that of a cabinet minister . i have decided to appoint him as chairman and chief executive of petronas which is equivalent to being a cabinet minister . . 11 subsequently razaleigh had to relinquish his job as chairman of pernas which he held from 1970 but retained the chairmanship of bank bumiputra . having created petronas the government had to choose what forms its dealings with private oil companies would take . starting with its legal monopoly on oil and gas activities and resources it had several options it could simply award concessions without taking part in production management or profits ; it could try offering services at the supply end ; or it could make contracts to cover profit sharing production sharing joint ventures sharing both profits and costs or all stages of the process under carried interest contracts . petronas first move was to negotiate the replacement of the leases granted to royal dutch shell on borneo and to esso in the peninsula with production sharing contracts which have been the favoured instrument alongside joint ventures ever since . these first contracts came into effect in 1976 . allowing for royalties to both federal and state governments and for cost recovery arrangements they laid down that the remainder would go 70 % to petronas and 30 % to the foreign company . esso began oil production in two offshore fields in 1978 exporting its share of the supply unlike petronas whose share was consumed within the country . petronas went downstream for the first time in 1976 when it was chosen by the association of south east asian nations asean to begin construction on the second asean joint industrial project a urea plant . the subsidiary asean bintulu fertiliser abf is based in sarawak and now exports ammonia and urea all over the world . also in 1976 malaysia became a net exporter of oil but exports were at such a low level as to