PETRONAS turned 50 this year.

Celebrating notable milestones, from its humble beginnings as a small player in the oil and gas industry to becoming a multinational corporation, the company now looks towards the next 50 years.

PETRONAS has weathered geopolitical, technological and environmental challenges over the years, adapting its strategy and positioning itself in the global shift towards cleaner energy.

PETRONAS’ journey is one defined by resilience.

Malaysia’s oil industry traces its origins back to Royal Dutch Shell’s significant discovery in Sarawak in 1910, during a period when foreign companies dominated the sector.

This left Malaysia with limited control over its resources, underscoring the need for local governance.

In response, the Malaysian government established Petroliam Nasional Berhad (PETRONAS)

in 1974, aimed at managing the country’s oil and gas resources.

The company’s pioneering team, composed of government bureaucrats and private sector experts, faced the daunting task of making the company profitable within 10 years, despite having little experience in the industry.

PETRONAS’ office was originally housed in a wooden building within the Prime Minister’s Office complex in Jalan Dato Onn, Kuala Lumpur, with only 18 employees and two telephone lines.

In mid-1975, it moved to a small office in the ENE Plaza on Jalan Pudu. The company’s main task was to enter the upstream sector of oil and gas exploration, and production.

As the pioneers would soon discover, the journey was anything but smooth. In those early days, PETRONAS faced significant challenges due to its limited experience in the global oil and gas industry.

Although new to the industry, PETRONAS achieved its first oil sale in 1975, shipping 358,000 barrels of Miri light crude oil to Japan.

This entry into the global energy market set the stage for subsequent developments, including the finalisation of its first production sharing contract (PSC).

One of its most critical tasks was negotiating PSCs with established foreign oil companies, an important step in safeguarding Malaysia’s sovereignty over its natural resources.

Initially, Malaysia’s oil and gas resources were governed by concession agreements, which allowed foreign companies to exercise control while providing the Malaysian government with limited financial benefits through royalties and taxes.

While these arrangements enabled exploration and production, they fell short of empowering Malaysia to harness the full potential of its natural resources.

By 1976, PETRONAS had negotiated its first PSC and replaced outdated concession agreements, leading to a notable shift in the relationship between the Malaysian government and foreign investors.

This change established a framework that provided greater benefits to the nation, culminating in the signing of its first PSC by PETRONAS through Malaysia Petroleum Management (MPM).

MPM, formed as PETRONAS’ first department, took responsibility for overseeing the entire life cycle of Malaysia’s upstream assets, ensuring their sustainable and efficient management to maximise value for the nation.

To sharpen its focus on exploration and production, PETRONAS established its wholly-owned exploration subsidiary, PETRONAS Carigali Sdn Bhd, in 1978.

A notable milestone for the company occurred in 1982 with the discovery of the Dulang oilfield, located 130km off the coast of Kuala Terengganu.

As Carigali’s first offshore oilfield, it began production in 1991, marking a key step forward in its offshore exploration activities.

The oilfield spans about 24km by 3.5km at water depths of about 76m.

Such a discovery became a catalyst for spurring Malaysia’s oil output through the management of complex operations using advanced oil extraction technologies.

This has led to the development of offshore platforms across the waters of Sabah, Sarawak and Peninsular Malaysia, which have sprouted like modern skyscrapers to this day.

In its pursuit of international expansion, PETRONAS began exploring oil opportunities beyond Malaysia in the early 1990s.

This move was supported by the establishment of PETRONAS Carigali International Ventures Sdn Bhd (PCIV) — formerly known as PETRONAS (E&P) Overseas Sdn Bhd (PEPOV) — which manages its international upstream portfolio.

PETRONAS’ first venture was in Myanmar, where it farmed into an existing block, gaining experience that helped it navigate diverse operational environments.

In 1991, the company secured its first operated international block in Vietnam with the discovery of the Ruby field, marking its transition from participant to operator in the industry.

These early ventures laid the groundwork for PETRONAS’ expansion, enabling the company to establish upstream operations in over 20 countries across Asia, Africa and the Americas.

Building on its strong foundation, PETRONAS is integrating decarbonisation into its core business and exploring new areas such as renewables, hydrogen, green mobility and nature-based solutions.

While exploration and production remain central to its operations, PETRONAS’ energy transition strategy rests on three strategic pillars.

The first pillar focuses on delivering more energy with lower emissions, noting natural gas as a transitional fuel in the global energy mix. By maintaining a robust gas portfolio, PETRONAS aims to meet rising energy demands while progressing towards a lower-carbon future.

This segment generates steady cash flow to support decarbonisation initiatives and new ventures, while also contributing to Malaysia’s economy through foreign direct investment and supporting the oil and gas services and equipment (OGSE) ecosystem.

The second pillar emphasises capturing new growth opportunities stemming from shifting market dynamics and regulatory changes.

Having identified nine new business areas, PETRONAS is focused on scaling initiatives in renewable energy, hydrogen, green mobility, specialty chemicals, carbon capture and storage (CCS) and the bio-based value chain.

The third pillar reflects PETRONAS’ commitment to achieving net zero carbon emissions by 2050, supported by a strategy that balances profitability with decarbonisation through innovation, collaboration and responsible resource management.

This includes efforts to reduce Scope 1 emissions — direct emissions from company-owned sources — and Scope 2 emissions — indirect emissions from purchased electricity, steam, heat or cooling.

To support this commitment, PETRONAS’ decarbonisation strategy is driven by four key levers, which are CCS, zero routine flaring and venting, energy efficiency and electrification.

Beyond climate action, PETRONAS is also committed to advancing its initiatives in nature, biodiversity and human rights.

These efforts are essential to the company’s long-term sustainability and key to achieving net zero carbon emissions.

Standing on the cusp of a new era, PETRONAS seeks to balance traditional energy production with cleaner energy solutions.

To meet future demand and support this transition, the company is investing in green technologies and expanding its renewable energy portfolio.

A cornerstone of this effort is Gentari, PETRONAS’ clean energy subsidiary, which focuses on renewable energy, hydrogen and green mobility as part of its decarbonisation strategy.

Another key initiative is the Kasawari CCS project that is set to begin operations by 2026, targeting the capture and storage of up to 3.3 million tonnes of CO2 annually.

PETRONAS is also developing CCS hubs in northern, southern and eastern Malaysia, which are projected to provide up to 80 million tonnes of storage capacity per year by 2050.

Through these efforts, PETRONAS is not only reducing its carbon footprint but also supporting Malaysia’s energy security and sustainability goals.

As the global energy landscape continues to evolve, PETRONAS remains committed to driving the transition towards a sustainable future — an effort rooted in the company’s history of resilience.