PETRONAS adopted a centralized functional organisation structure which the executive vice president (EVC) and vice presidents (VC) have to constantly report their performance to the CEO. Each VC or EVP from respective function are responsible to monitor and controlling the overseas operation with the aids of overseas joint venture companies or partners
2.0 External Analysis of PETRONAS
2.1 Political
PETRONAS’S oil exploration often takes place in high political risk countries such as Sudan and Iraq with abundant resources of oil and natural gas. Sudan has been in political instability and having war for more than three-quarters of its existence due to the independence, protracted conflict rooted in deep cultural and religious differences which has slowed down country economical and political development (U.S. State Department, 2010). Recently, Sudan’s internal war evolved from the issue of exploring more oil region outside the territory because of depletion of the existing oil reserves. Despite political instability of Sudan could disrupt PETRONAS in oil exploration, the company had strengthened its politics affiliation through Malaysian Government to mitigate the effect. For example, PETRONAS is welcome by Sudan Government to pursue exploration and development works in its, Melut and Muglad Basins which has expanded in both the upstream and downstream sectors of the country’s oil and gas industry (PETRONAS, 2010).
Besides, liberalize of countries’ trade policy is prominent to guarantee the profitability of PETRONAS’s overseas operation. In Malaysian, fewer tariffs are imposed on petroleum and gas product. PETRONAS is assigned to regulate the upstream activities in oil and gas as well as controlling the foreign investment of upstream petroleum and gas industry through the form of production-sharing contracts (PSCs), between foreign investors and PETRONAS. Likewise, South Africa’s government also developed their national oil and natural gas company, Petroleum Oil and Gas Corporation of South Africa (PetroSA) on managing and promoting the licensing of oil and gas exploration includes onshore and offshore exploration of the country. Thus, PETRONAS set its own oil refining and marketing presence in Africa through its 80% owned subsidiary, Engen Petroleum Limited “ENGEN”, a leading South African refining and marketing company.
2.2 Social
Islam remain as the important role in shaping Malaysia’s position on many international issues especially those related to the Muslim world of which the Middle East is a part (Ruhanas Harun, 2009). Middle East and North Africa account for 60.4% of the world oil reserve which are the important for P
