Mohd Azhar Osman Khairuddin, a senior general manager of Petronas, will not say exactly how much the Malaysian national oil and gas firm spends annually on the Formula One Grand Prix, for which Malaysia is currently one of the 17 race venues.

A rough indicator would be the several hundred million US dollars a year it costs to sponsor the Italian-based Ferrari team. As for the three-decades-old Petronas, it is both title and team sponsor in the Formula One Grand Prix championship, the latest round of which was held at the Sepang International Circuit near Kuala Lumpur last weekend.

Petronas sponsors the BMW Sauber team, which came fourth at Sepang, this season's second venue after Melbourne in Australia.

Osman, 50, says the reason for Malaysia's high-profile role in motor sports is that it is a powerful tool for branding the company and the country on the international stage.

The 27-year Petronas veteran, who loves fast cars himself and drives a BMW Series 5, recalls that former Malaysian premier Dr Mahathir Mohamad was the principal supporter of these initiatives back in the 1990s.

"We wanted to go overseas and create a global brand, so a fast track was via F1, which is one of the world's premier sport events. We first joined F1 in 1995-6. The [former] PM also wanted the branding of Malaysia [via our involvement]. Altogether, it's about corporate, country and tourism branding," says Osman, who holds a law degree from the University of Malaya.

The Malaysian leader later pushed for the construction of the Sepang International Circuit, which cost about 300 million ringgit (Bt2.8 billion), and the country then made a successful bid for the right to host one of the F1 rounds.

"We hoped races could be held and seen here in Malaysia. It's for both the locals and foreign visitors. Now there are up to 120,000 spectators annually, of whom about 40 per cent are foreigners. That's the tourism part," Osman explains.

"Then there's the lubricant-business part. Since F1 is renowned for ear-shattering speed [over 300 kilometres per hour], precision (less than 30 seconds for a tyre change or refuelling) and safety, we focused on motor sports for branding our lube products, which have better profit margins than selling petrol. In the lube business we're quite competitive in terms of raw materials since we're a producer of indigenous sweet crude, which is a high-quality base oil for lubes.

"We've been increasing customer awareness of our F1 role in the lubricant market with products like Symtium for BMW cars, for instance. In my opinion, the F1 global branding effort also helps increase the recognition of Petronas brands in Asia as well as Europe and Africa. We want people to know about the brands first.

"Then we hope the high-end image of F1 and the BMW Sauber team will help boost our products' image.

"In terms of the auto industry [in which Malaysia has been promoting its national car brand, Proton], we've also benefited from the technology transfer in engines," says Osman. In 2005 Petronas, the world's eighth most profitable oil and gas company in 2006 with post-tax profit of US$11.6 billion (Bt405 billion), invested more than $60 million in acquiring the 117-outlet petrol retail chain of Kuwait Petroleum in the Thai market.

Petronas also has business ties with Thailand via its exploration and production in the Malaysia-Thailand Joint Development Area (JDA), an overlapping hydrocarbon-rich zone between Malaysian waters and southern Thailand.

Elsewhere it has retail and marketing units in South Africa (a 125,000-barrel-per-day refinery and 1,250 service stations), Sudan (73 service stations), Cambodia and Indonesia.

Coming back to Formula One, there are a total of 11 teams competing in the 2007 season, with 22 drivers attempting to collect the most points from the 17 races to win the world championship.

Petronas has a four-year contract with the BMW Sauber team, which finished in third place last year and is currently in fourth slot, Osman says. As for himself, an occasional treat is to take his BMW out on a race circuit and rev up to 180 or 200kph.

Nophakhun Limsamarnphun

nop1122@yahoo.com