Petronas: Portents in petroleum
The flotation of two subsidiaries of the Malaysian state oil company Petronas raises hopes that the parent company may list. This would help the profile of Malaysia’s equity market but could also weaken Petronas’s role as the source of almost half of state revenues. Chris Wright reports.
IN THE NEXT few months, two businesses owned by Malaysian state oil company Petronas will list on Kuala Lumpur’s stock exchange. They are big deals in their own right and will probably raise at least $3 billion between them, but it’s what they portend that’s got people really excited. Could these listings, part of a new national policy of floating more state assets, be a step towards an IPO of Petronas itself?
What a trophy that would be. Malaysia’s only Fortune 500 company, ranked 107th in the world in the 2010 list, is extraordinarily powerful, "vested," as Petronas itself puts it, "with the entire ownership and control of the petroleum resources in the country." Petronas is the backstop for the national budget, the best-run company in the country by common opinion, and probably Malaysia’s only truly successful multinational. If these two IPOs prefigure the whole thing coming to market, then it’s not just the investment bankers who would be salivating: it would transform the Malaysian market.
Petronas started life in August 1974, a function of the five-year-plan launched by the ruling Barisan Nasional Party – still the leadership today – upon the restoration of parliament three years earlier.