Petronas-Mercedes GP deal is beneficial for the nation

Yesterday, it was announced that Petronas went into the sponsorship of the acclaimed Formula One team Mercedes GP. It was a pleasant surprise after BMW abruptly decided to discontinue with the BMW-Petronas-Sauber Formula One team few months ago.

Reuters has the story:

Petronas to sponsor Mercedes F1 team


 Monday, 21 December 2009

Malaysian state oil and gas company Petronas [PETR.UL] will be title sponsor of the Mercedes Formula One team next season, Mercedes announced today.The team, formerly champions Brawn GP, will become Mercedes GP Petronas with the oil company’s branding across the car and team liveries in what they said was a long-term agreement.  
“The new title partnership also paves the way for future collaborations between the two companies,” Mercedes added in a statement. 

It said Petronas would be able to “generate sustainable business growth, particularly in their downstream lubricants market, through the strategic partnership and business alliance with Mercedes-Benz.”   

Mercedes said their 2010 car would be presented in its new livery for the first test of the new season at the Valencia circuit in Spain on Feb. 1.  

 Petronas, who previously sponsored the BMW-Sauber team, will continue to be the title backer of the Malaysian Grand Prix – the third round of the season at Sepang on April 4.  

 “Petronas’s home base in Kuala Lumpur is located in the middle of a fast-growing region for the automotive industry which makes this new partnership even more valuable,” said Mercedes motorsport vice-president Norbert Haug.  

 The deal with Mercedes will be a blow to both Swiss-based Sauber, in urgent need of sponsors after the withdrawal of BMW at the end of the season, as well as the new Malaysian-backed Lotus team.  

 Lotus F1 boss Tony Fernandes, who also runs AirAsia (AIRA.KL), had hoped to bring Petronas on board given that his team have government support and his airline is a major purchaser of aviation fuel.  

 The Lotus car company is also owned by Malaysian state car company Proton (PROT.KL).  

 Mercedes have signed Germany’s Nico Rosberg as one driver and are widely expected to have seven-times world champion Michael Schumacher as the other if he makes a comeback at the age of 41.


Petronas frustrated AirAsia’s CEO Tony Fernandez’s Lotus 1 Malaysia Formula One team with this sponsorshop deal. Lotus who engaged former failed Minardi drive Alex Yoong, expected to have the state oil corporation backing them up, since AirAsia has been using Petronas JetA1 aviation fuel for their operations. Yoong, expressed his dismay on his twitter and reported widely by the media.

ESPN reports:

December 21, 2009

Yoong speechless at Petronas deal

ESPNF1 Staff
Mercedes’ concept livery with Petronas sponsors © Mercedes

Despite being linked with both Sauber and the Malaysian backed Lotus team, Malaysian oil company Petronas has signed as title sponsor for Mercedes for 2010.

The country’s first – and so far only – Formula One driver Alex Yoong, who is now head of driver development for Lotus, has expressed his despair at the deal on Twitter.

“Petronas signs with Mercedes GP,” he wrote. “Words fail me. Mercedes is a good team, no doubt, but what Lotus is doing is completely ground-breaking and brave and Petronas not seeing that fills me with shame.”

The exact length and value of the Petronas deal has not been announced, but team principal Ross Brawn welcomed the news.

“Everyone at Mercedes GP is delighted to confirm our long-term agreement with Petronas and we look forward to working closely with our new partner in the future,” he said. “Our plans for the new season are progressing well, as is the development of our 2010 challenger, and we look forward to seeing the car run in the new Silver Arrows and Petronas livery at the Valencia test in February.”

The sponsorship is good news for Mercedes, after German consumer goods company Henkel announced it would not be honouring a deal with the team as it was brokered by an unauthorised member of staff. However, Mercedes motorsport boss Norbert Haug said the contract with Petronas would ensure the team’s competitiveness in 2010.

“Within the limits of the new Formula One resource restrictions, the Mercedes GP Petronas Formula One Team will be well positioned to achieve our goals. We will all strive to present efficient success in the future knowing at the same time that the new season, with some fundamental rule changes, will be a particularly challenging one.”



There is more to meet the eye with these Formula One sponsorships. For starters, it is more strategic for Pertonas to sponsor and partner the Mercedes GP team against the Lotus F1 team. The fact is that the Lotus F1 team is expected not to go very far with their effort. This is because the investment that sponsors like AirAsia willing to commit is far too low to be realistic. AirAsia announced that they are investing RM 300 million within the next three years for the Lotus F1 team, which is effectively less that 55 million Euro. That is by far adequate to be effective for a ful fledge Formula One team, especially the development of the engine has to be dynamic and this will cost a lot of money.

The most important reason is that Petronas will immensely benefit from this Mercedes GP deal. From 2010, all Mercedes Benz cars in China, Turkey and UK markets assembled will be ‘first-filled’ and subsequently serviced using Petronas Synthium lubricants. For the first year alone,  the business is expected to be  in excess of RM 200 million. Within five years, the business will be expected to be in the neighbourhood of RM 1.5 billion, especially when Mercedes open other markets as well for exclusivity with Petronas lubricants. It will make Petronas lubricant products grow into markets previously enjoyed by Helix, Castrol, Agip and Duckhams.

The move to bring back world champion Michael Schumacher back into Formula One will definitely land a big boost for Petronas  branding exercise with this Mercedes GP deal, despite skepticism on the one time world champion to come out of retirement. Mercedes would be expected to place themselves well in the highly viewed race and Petronas would be at par with what Shell is enjoying at the moment in partnership with the Ferrari team. Petronas racing team, which is has been developed progressively the past ten years, will also get technological synergy with this strategic partnership. The ‘brand’ of ‘Ross Brawn’ itself is a boon for Petronas racing team.

 This is far more effective method to ‘sell Malaysia’, as oppose to Fernandes’s non challant effort to be in Formula One and suspiciously intending GLCs to be drawn into the ‘half-baked scheme’, with the “1 Malaysia” tag ‘attached’ to the ‘branding exercise’. It is believed that AirAsia needed the ‘F 1 sponsorship exposure’, along with its intended AirAsia X expansion to the North American west coast. The success of the Lotus team with this what is thought to be ‘inadequate’ AirAsia ‘commitment’ is doubtful. A mitigating point is that Schumacher is expected to be paid 20 million Euro per annum, which itself lesser than AirAsia’s commitment for the same period.

Petronas is expected to gain better branding milage with this new deal as compared to the previous BMW-Sauber partnership. The inclusion of Petronas Synthium products with newly assembled and future cars serviced by Mercedes Benz in the three countries and expected expansion markets if by far better than the deal with BMW.

This is the third success story of Petronas this year under the stewardship of Tan Sri Hassan Merican. The recent announcement of Petronas’s success to land new exploration deals in Iraq drawn a lot of respect to the most progressive ‘New Seven Sisters’. Petronas is involved as a major partner in consortiums of the Majnoon, Halfaya and Badra fields, which has an aggregate reserve of almost 42 billion barrels of crude oil. Petronas is taking the lead in the Garraf field. All these concessions would be finalised and signed by end of next week.

*Updated 1030pm


Who is Alex Yoong as compared to Ross Brawn and Michael Schumacher? Has Yoong had any success story to come out which such a statement against Petronas’s decision?



Published in: on December 22, 2009 at 16:06  Comments (37)  

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  1. woi alex yoong. u cant even got qualified to race, so shut up. come on la, takkan la nak berkembang dalam satu mangkuk? takkan la sume syrikat malaysia nak taja pasukan dari malaysia? biarlah syarkat kita taja org luar juga, kembangkan sayap. tak berkembang betul la.






  3. Maybe lotus can use the jet engines that were stolen for more vrooom kah kah kah.

  4. Energy Received , Energy Return , Aspiring People Everywhere ….. Well Done Petronas ! Well Done Hassan Merican … and Good Job Tun Mahathir!

  5. Congratulations Petronas ! you have make a correct choice.

  6. Tony pemakan duit Airport TAX, Alex yoong who? The looser with Minardi you both shut up. Petronas deal actually for a strategic partnership with PROVEN ENGINE. Lube deal with Merc will be a booster pill for PETRONAS syntium. PETRONAS’s name TAG along with MERC what a good combination in Technology and Business.

  7. What or why should Alex Yoong get upset for? They don’t need him. But its good for Petronas. Even if I’m in charge, I’d pick Mercedes over Air Asia. Sorry Tony. 🙂 Petronas is going to be big. Hopefully the biggest. We’d show them yet.

  8. Good for you Big Dog. Some cheap shits try to get Petronas to spend all the money and they themselves would spend pittance while hoping to get maximum milage.

    Proton, how did you get conned into this this F1 thingy?

    I think in the firt year, your cars will always occupy the last two places when they line up for the races. or worst may be starting from the pits.

    This sport, for the moment, is far above your head in ever respect.


    • Great move by Petronas. Happy, Petronas were not ‘waylaid’ by Tony. He wants all the publicity but will get someone else to foot the bill. Typical, Tony style, ‘milking ‘ others. sudah banyak kali dah. Tony show us the money ………….. crap can walk. hal Proton , what to say…. sudah lah nyawa -nyawa ikan , tapi mahu sponsor F1 team. are you real , considering the big car manufacturers are turning their back on F1.

      • “sudah lah nyawa -nyawa ikan , tapi mahu sponsor F1 team. are you real” Yes so unreal!!

        angan-angan Mt Jenin


  9. great move by petronas!!!
    thumbs up to hassan merican(low profile type of boss)
    brilliat idea!!!! (The inclusion of Petronas Synthium products with newly assembled and future cars serviced by Mercedes Benz in the three countries)…

    let us pray so that hassan can continue his job not omar ong…

  10. Yang ini I agree…Petronas must be aligned to a good brand i.e Mercedes Benz….This Yoong fella..he can go on and drive Bas Mini or Rapid je..Yoong has to acknowledge that he failed miserably as a F1 driver..or even A1 driver…not to bash Alex Yoong..but when he was in F1…he never fail to make me laugh seeing him ‘not driving’..and what I heard..Alex Yoong is Lotus F1 driver’s development something. Are they saying that Yoong is better than Jarno / Heiki…?? Let’s put some smile on the face..
    Al farabi

  11.’s better for petronas to sponsor Mercedes compared to lotus.

    Hassan Marican really smart!

    lotus can use the missing TUDM engine (RM50 million only)..:p

  12. the latest news is that micheal schumacher has agreed to drive for mercedes next season. so things will only get better for the team. and petronas.

    everyone, including kamarudin meranum, tony, and alex knows petronas was planning to ‘ sponsor a new team’ for 2010 calendar. they should have send a credible courting team to try and convince about their business plan. but since petronas now signed with mercedes, then thats leave us with just 2 reasons why they havent managed to get petronas on board.

    first maybe they dont even try and just hope petronas will come jilat their feet to sponsor.


    they did send a courting team, but the team failed. i imagine the members of this team includes yoong, tony, kamarudin themselves. and then THEY FAILED.

    so please yoong, move on. u are not a such bad personality and a decent driver before, but as far as i can remember, that ozzie webber also drove minardi with u last time, and yet now hes flying with red bull. hes even challenged for the drivers championship season 2009!

    thats a pretty darn good record for you to once partner him. but unfortunately of course you kicked out of only from minardi, but from the sport althougether. maybe u blame lack of fund or sponsorhips, but webber is doing fine that lad, hasnt he?

    yoong knows perfectly well how this financial thing works in F1. if u are good, then sponsors will pour in. if u arent, then paham2 saja la.

    find another one la yoong. and ah, bahrain is starting in…. less than…2 months? another half baked tony fetuccine?

  13. Pada saya, lebih baik PETRONAS tak sponsor mana-mana F1 team pun. Sebabnya jenama PETRONAS sudah terkenal dan produk PETRONAS telah terbukti bagus. Jadi mengapa membazir nak sponsor F1 team? Adalah lebih baik PETRONAS gunakan wang tersebut untuk sponsor pembangunan bio-diesel seperti membuka ladang sawit atau jathropa (jarak). Ini lebih menampakkan PETRONAS sebagai konglomerat yang prihati terhadap alam sekitar dimana minyak fossil adalah antara penyebab utama pemanasan global.

    Secara perbandingan, penajaan sesebuah F1 team berupaya membuka ladang jathropa seluas beribu-ribu hektar. Perlu diningat bahawa polisi Kerajaan sekarang adalah mempergiatkan “renewable energy”. Dengan bio-diesel, PETRONAS akan lebih kukuh untuk jangka masa yang panjang…..




    Read MYSTERY: Anwar tukar sampel DNA untuk bukti Afifa anak Azmin?


    Read Terbongkar semula : Anwar arah DNA afifa ditukar ?


    Read Skandal Anwar dan Shamshida


  15. Now add Michael Schumacher!! Back with Ross Brawn. Wish Adrian Newey is in too. Now that’s a force to be reckon with!

    I think Lotus will have to earn points first to earn Petronas sponsorship. This is not biasiswa, Alex Yoong!

  16. 1malaysia pakai enjin F5E……hahahahahaha. That’s a good one. Salute. Give them 5min handicap….then baru….booooom. Hahahahahahaha.

  17. Congratulations Hassan Merican & team. A decision only a world class mind can make. It was a delightful surprise indeed. Keep up the excellent work in caring for Petronas and Malaysia.

  18. apa yang di katakan oleh alex yoong ada benarnya. mengapa hassan merican boleh melakukan sesuatu yang tidak di persetujui oleh orang kita sendiri. rasanya hassan merican sudah boleh mengucapkan selamat tinggal kepada petronas. harap dato seri najib boleh mencari orang yang lebih berkaliber utk menggantikan hassan merican.

    • “mengapa hassan merican boleh melakukan sesuatu yang tidak di persetujui oleh orang kita sendiri”

      Siapa “orang kita” ni? Berapa kerat yang tak setuju? Nampaknya hampir semua commenters setakat sini faham dan setuju dengan tindakan Petronas.


    • Pendapat Marina ini pelik, malahan bodoh. Saya sokong pertanyaan Mohamed – siapa yang dimaksudkannya “orang kita sendiri” itu?

      Tambahan pula, siapa yang dimaksudkannya “lebih berkaliber utk menggantikan Hassan Merican”? Omar Ong? Yang tak bayar tuntutan Petronas hingga di bawa keMahkamah itu? Yang nyata tidak bertanggung jawab itu? Yang semua diPetronas Board of Directors tolak itu? Yang Najib pahat juga kePetronas BOD itu? Yang menyebabkan ramai orang mencurigai tujuan Najib dengan tindak tanduk yang aneh itu?

      • May be this marina is Omar Ong. “orang yang lebih berkaliber utk menggantikan hassan merican.”



  19. I think most people don’t understand the logic behind this sponsorship. For Petronas it’s about branding. With Mercedes and Schumacher at the forefront, it will get huge mileage. Comparatively, it’s tough to do it with a start-up like Lotus.

    To the person who thinks Hassan Merican is doing a lousy job at Petronas, think again. Under his stewardship, it has grown by leaps and bounds. Bear in my mind that Petronas is one of the largest contributors to our GDP. None of the founders could have imagined that Petronas could be the “Seven Sisters”. It is now. Exploration overseas? Check. Paying annual dividends and taxes to the Government? Check.

    • Tsk tsk tsk.. I kept quiet because since you ppl so megah about Petronas and Hassan, cakap la apa you nak. But no, must have some ppl still wanna bising about my previous comments. Typical Melayu pandai cakap, malas buat kerja:

      “Petronas started F1 as a branding programme but we have since moved into the business. We had a very good relationship with Sauber that exposed our brand and gave us the opportunity to go global with our lubricants. It’s also timely when BMW took over Sauber and that gave us an opportunity to partner with an original equipment manufacturer (OEM). The years we were together with BMW and Sauber we benefited from the lubricant business. Petronas now has a 2% share of the global lubricants market while also being an OEM lubricant supplier to the Fiat Group. Next year, we have no team and the only reason for us to go back into Formula 1 is on a business deal, for the lubricant business.”

      That was from your idol, Hassan. (So much for your branding theories, huh) And the only reason he is in the lube business is because he bought FL Selenia for Euro 1 billion back in 2007. Now he has to see how to make it worthwhile.

      As for the Iraq deal, it is only worth 30% of USD 1.39 /bbl to Petronas. Sure there is money to be made on a potential reserve of 12-23 billion. But there is also a USD 8 billion in new investment to raise the current production level of 45.9 kbpd to 1.8 mbpd. (So please uncheck your Exploration overseas. This is a service contract.)

      Petronas’ partner Shell has this to say about another oilfield in Iraq:

      “Despite the anticipation, no one bid for one of the supergiants, the 8.1-billion barrel East Baghdad field, part of which lies under the sprawling Sadr City slum in the Iraqi capital. Baghdad is still wracked by periodic bombings and oil executives considered it unsafe to invest in the field.”

      The oilfield Petronas and Shell is developing, Majnoon, is near Basra. (Why don’t you sign up to work there. Pay will be damn good and plus you get the opportunity to go to work toting a nice AK47.)

      Both the Mercedes and Iraqi deals are commercially viable. I did not say Hassan cannot do the job. He did a fine job before and like any other CEO there are shits in their closet too.

      And since you raise the matter. Let’s look at the potential downside of these two deals.For the Iraqi deal, we looking at risk on political stability and proven reserves estimates. The returns will not be there if the oil is not there (as in the Egypt’s gas terminal investment) and we might get returns of dead (God forbid) Malaysian bodies.

      As for the title sponsorship, we are again putting ourselves as a laughing stock. (I thought we were finish with that under Badawi’s administration.) The rest of the world will wonder why Petronas did not back their own Malaysian team.

      For those who put money above anything else, the Majnoon and Mercedes deals are worthwhile.

      I am not a fan of that stupid Indian proxy, apanama dia, Tony. And yes, I am a racist. Proton is owned by Khazanah and Air Asia, Kamal. If Hassan can bail out MISC on an arms length (and arm twisted) basis, no reason why he cannot help the wholly-owned Malaysian F1 team. Of course, Pak Lah is not PM to tell him to do so.

      But this is not about Kamal, Tony, Alex, Hassan or Fairuz. If you can see the bigger picture you would know what I mean.

      Sometimes we need to put aside our differences and work towards a common good. But then again, I shouldn’t be telling you ppl all this. You are, after all, UMNO, kuat dengan ketuanan Melayu. Melayu bolih… Even among Melayu, kita bolih maki hamun.

      Today, your big boss, TDM said something about to forget your origin and be a Malaysian. That applies to the Malays too. If everyone (ok la, 80%) subscribe to this, Malaysia would be a much better place to live.

      • Sdr All Goly

        You wrote, “For those who put money above anything else, the Majnoon and Mercedes deals are worthwhile.”

        I wish you stop there. To me it is always nice to make some money and a little success to boot.

        We may never know the future, but my guts feeling is that mercedes is going to be an exciting team to watch next year.

        Millions of people will be watching, when TV camera locks on the car, we can see the word PETRONAS.

        Many commenters here believe that it is a good comercial deal too.


  20. 1. I myself was actually speechless to see Alex Yoong in the Malaysia Formula 1 team. Words failed me. Fairuz got to where he is now without Alex, and Fairuz’s achievement is far superior to Alex’s. Fairuz probably could teach Alex a thing or two about driving a race car. Fairuz deserves his chance to be in the team. But Alex?

    2. Shell is a much bigger and more successful oil company, and they are investing in Formula 1. It is only good business.

    • Alex Yong? Yes I also wonder.

      But it reminds me of go-cart circuit that my son took me to, a few years back. He got me to drive one!!. The only thing good about the cart was the throttle. The brake and the steering were not responding as it should. So I decided to drive as best as I can. My son lapped me a few times.

      When we met again at the pit, I said “Son, now I know how Alex Yong felt.”


  21. Sdr All Golf

    Sorry to have spelled your name “All Goly”. It should be All Golf. It is a typo error.


    • No worries, Bro.

      Unlike those I bitch about, you are not being hypocritical when you said its about money and fame. You are honest about it and that’s good.

      Likewise, if we find it difficult to put in hard work and effort to achieve success, buy it. Kita Melayu, kita kaya. Kita ada Petronas. Tak payah nak susah-susah harapkan Proton atau pun orang India tu. Bayar aje!

      Paying Mercedes GP may be an easier way to be achieve success and fame, but getting there with hard work and innovation from the Malaysian Lotus team would be priceless (not to mention, a miracle.)

      I am no fan of F1 nor any sports (including golf.) But since it seems to be such an important event for some, what the heck, shouldn’t we at least try getting Lotus to win the constructor’s championship?

      Hahahha maybe I’m just dreaming..

      Or maybe there is a deeper meaning when Martin Luther King said ‘I have a dream.’

  22. Iam agree 100% with PETRONAS decisions.

    PETRONAS is a business entity which main objective is to make profits. Our goverment depends on PETRONAS heavly, PETRONAS cannot make mistake in their move. Or the other way you can see it, even if the bloods may shed(Iraq’s deals) to get the money is, so be it.

    Branding is a way to promotes yourself. Without branding, youre nothing. PETRONAS is not a local company doing bussiness in Malaysia anymore. To success, PETRONAS must be recognise worldwide.

    PETRONAS capital reinvestment now is amongsts the lowest compare to other oil producers. What peoples expect? To waste further the’ciput’ money… Please don’t subscribe to this mentality anymore. Do it like gentlemens, find those whose wiling to spend the money for this team.

    * and PROTON decision is stupid (at this time!)….

    • 1. Petronas is a statutory body form through an act of Parliment. Profitability is not the only objective. (Read the Petroleum Development Act 1974 for some insight.)

      2. Our government depends on Petronas heavily because of the stupdidity of Badawi’s administration. They based the country’s budget on USD 160/bbl because they thought the last fuel hike was permanent. Petronas, then, still maintain their budgeting at USD 70/bbl. (This one you cannot read anywhere. This was told to me by some bigwig insiders.)

      3.Read my previous post on what Hassan said on the reason for sponsoring in F1. Petronas does not need to make its brand. Even BigDog’s last paragraph mentioned Petronas as one of the ‘New Seven Sisters’ – an indication of Petronas market position today.

      4.Petronas capital reinvestment is low because Petronas anchor its business in producing and selling Malaysia’s own petroleum and gas products which it makes roughly 95% profit margin. How? Cuz for Petronas, cost of oil is zero, nada, FOC. (Read Petronas Financial Statement available to the public from the website.)

      5.Lastly, bloodshed for profits? I can only think of one situation where I’d back you on this – if Pakatan ever takes over the goverment. You wield your parang (or keris, whichever you prefer) and I’d back you all the way, brother. Hidup UMNO!

      Likewise, I read some bird (a magpie) is barking at you too.

  23. GDP of Republic of Korea is more than the combined GDP of the Asean 10 Countries. I wonder why they are not in the F1 Race.

  24. Hi All Golf,
    What do you do for a living? Seems that you’re quite well informed.

  25. […] a Malay corporate success? All these is not with standing the fingers that would be crossed for the media-adrenalised Petronas’s sponsorship of the Mercedes GP Formula 1 team over Tony Fernandes’s Lotus F1 Team, which the latter wanted to call as “1 Malaysia F1 […]

  26. article to make thing clear 4 evryone about petronas neh..!!!,dwp_uuid=0bda728c-ccd0-11db-a938-000b5df10621.html

  27. […] Then they branded it as ‘Lotus Racing, under license from Group Lotus. At the same time, Fernandes lobbied very hard to get Petronas to go with his Lotus Team and become their major sponsor. Instead, Petronas went with Brawn GP, to be Petronas-Mercedes GP. […]

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