The type of firm we are going to investigate in this assignment is an oligopolistic firm. The essence of an oligopolistic market is that here are only a few sellers. As a result, the actions of any one seller in the market can have a large impact on the profits of all the other sellers. Oligopolistic firms are interdependent in a way that competitive firms are not. The company we chose to study is Petronas.
2. Profile of Petronas
3. Characteristics of Oligopolistic
firm – Petronas
4. Advantages to Malaysian Economy
5. Disadvantages to Malaysian
Economy from Petronas
Profile of Petronas
Ranked among the FORTUNE Global 500® largest corporations in the world, Petroliam Nasional Berhad, most commonly known as PETRONAS, is a Malaysian state-owned oil and gas company which ventures into a wide range of petroleum activities. Established in the year 1974, PETRONAS was incorporated alongside the enforcement of the Petroleum Development Act 1974 (Malaysian Explorer, 2012). Today, being owned entirely by the Malaysian government under the Ministry of Finance, PETRONAS is entrusted with the responsibility to manage the entire nation’s hydrocarbon resources (Rig Zone, 2013) and to ensure the sustainability and orderliness of the country’s oil and gas industry is prolonged.
Vision, Mission & Shared Values
Vision and Mission
These statements define PETRONAS as an organisation, guiding our corporate activities and policies, setting our course for the future.
To be a Leading Oil and Gas Multinational of Choice
• We are a business entity
• Petroleum is our core business
• Our primary responsibility is to develop and add value to this national resource
• Our objective is to contribute to the well-being of the people and the nation
Our values are embedded in our culture as the backbone of our business conduct, reflecting our sense of duty and responsibility in upholding our commitment towards contributing to the well-being of peoples and nations wherever we operate.
CHARACTERISTICS OF PETRONAS
Having the Malaysian government as its major shareholders, PETRONAS adapts an oligopoly market structure and has a fairly large amount of control over the market for petrol in our nation. Oligopoly is defined as a market structure that consists of a few firms that are controlling a market which, in this case is the petrol market, and has influence on prices and are interdependent on competitors (The Free Dictionary, 2012).
PETRONAS is considered to be an oligopoly because the company also fits the description which mentions that only a few firms would dominate the oligopoly market as it is one out of ten of the major oil companies that are operating in our home country, such as BP, Shell, and Caltex. The corporation is the first national oil and gas company to be founded in our country and is one of the world’s biggest liquefied natural gas (LNG)...