Additional investment is being made to increase its brand's competitiveness in the deregulated Thai market, where competition is fierce and profit margins thin.

Besides retailing, Petronas is a key partner in the Malaysia-Thailand Joint Development Area and the Trans-Thailand-Malaysia Gas Pipeline System in southern Thailand, together with PTT Plc and other international oil firms.

Thanks to the rise in oil prices, Petronas was ranked the world's eighth most profitable oil company in 2006 by Fortune magazine, earning an after-tax profit of $11.6 billion on revenues of $44.3 billion, making it one of only two national oil firms on the top-10 list.

Based on profitability, Petronas is several times bigger than PTT Plc, Thailand's listed state oil and gas company, largely because of Malaysia's larger petroleum reserves. The latest data show that Malaysia has 5.25 billion barrels of oil and 88 trillion standard cubic feet of gas, whereas Thailand's oil reserves are insignificant and its gas reserves smaller than its neighbour's.

In the past three decades, Petronas, whose holding company is unlisted but whose four subsidiaries are listed on the stock exchange, seems to have played a pivotal role in the development of Malaysia, which achieved independence from Britain five decades ago.

Interestingly, I was told Petronas and China's CNPC (ranked seventh on the Fortune list with a net profit of $13 billion) were currently the only two on the top-10 list of most profitable national oil firms, whereas Petromina of Indonesia and other state oil firms in the Middle East, where oil and gas are far more abundant than in Malaysia, were not.

A Malaysian colleague suggested that his country's system was probably more transparent, making it difficult to siphon off public money. In addition, he pointed out that the top leadership, especially former premier Dr Mahathir Mohamad, has been far-sighted and highly competent.

Other Malaysian friends also gave credit to Mahathir when talking about Malaysia's success hosting one of the world's 17 Formula One Grand Prix events, the construction of Kuala Lumpur's landmark Petronas twin towers, or the new administrative capital, Putrajaya.

Malaysia has turned its commercial right to host one race in the world's premier auto-racing championship at its Sepang International Circuit into a powerful promotional vehicle for its national image, its tourism industry and its petroleum products, some of which are marketed in 34 countries, including Thailand, with plans to make further inroads into European markets.

Petronas, Malaysia's largest company, is understood to have been spending several hundred million dollars a year in its role as the title sponsor of the Malaysian Formula One Grand Prix and as principal sponsor of the BMW Sauber team.

Petronas is said to have spent around two billion ringgit (Bt20.2 billion) each on the world-renowned twin towers, which dominates Kuala Lumpur's skyline with a height of 452 metres and a bridge between them 170 metres above ground. One of the towers is used by the conglomerate's 30,000-plus employees, while the other is rented out as office, commercial and retail space. Other skyscrapers may have already overtaken this corporate head office in terms of height, but the twin towers are likely to remain the tallest of their kind as it would need double the investment to build a taller version today.

Petronas is also playing a leading role in Putrajaya as it holds 60 per cent of the corporation tasked with developing the new Malaysian administrative capital. More than an hour's drive from Kuala Lumpur, Putrajaya is intended to reduce the congestion in the old capital, and 80 per cent of all government offices have already moved there. With a current population of just over 30,000, the brand-new city will ultimately house all government ministries except defence and two others. It also has a recently opened convention centre with a total area of 135,000 square metres to attract international conferences and events.

The overall investment outlay for this beautifully designed city is not available, but a Malaysian official said it was more than 25 billion ringgit, with the bulk coming from Petronas.

Nophakhun Limsamarnphun

 nop1122@yahoo.com