Malaysian state-owned oil company Petronas is to conclude its title sponsorship agreement with Mercedes-AMG F1 at the end of the season, after 11 years since it joined forces with the German team.
Decalspotters understands from sources that Petronas is departing from its association with Formula 1 and the Mercedes-AMG team as the 2022 season concludes, with Saudi oil giant Aramco set to be its replacement.
Petronas has backed the Brackley-based team since its return as a works team in 2010, having won 7 World Contructors and Drivers’ Championships together.
Mercedes’ success in the F1 hybrid-era is commonly attributed to the rapid evolution of Petronas lubricants and oil formulas which were developed across the years in Malaysia and at Grands Prix.
Since its association with the German manufacturer, Petronas has become an important name in motorsport, alongside Mercedes’ projects in GT and a short-lived prospect in MotoGP.
The Malaysian oil company has suffered massively in its finances from the COVID-19 pandemic, as it recorded multi-million loses since 2020 due to lower oil prices and demand.
It comes as no surprise Petronas would reassess its marketing efforts in F1 and implement cost-cutting measures after a huge economic hit and the announcement of the company’s withdrawal from motorcycling racing in August.
As such, Petronas is to be uninvolved with world-class motorsport championships for the first time since the early ’90s.
Old friends, new chapter
Aramco is the name of the title sponsor to-be, another state-owned company from Saudi Arabia.
The oil giant signed as a Formula 1 Global Partner at the start of 2020 on a multi-year deal valued at more than $450 million, including naming rights to 3 Grands Prix and supporting F1’s Esports division.
Since the announcement, F1 fans have been vocal about the sport’s involvement with Aramco, criticising the Saudi government’s human rights record and sportswashing attempts.
However, this isn’t the first time Aramco has been involved in talks with Mercedes-AMG, Decalspotters learned, as the company was discussing signing with the team instead of F1.
Despite the successes on-track, Petronas higher-ups were unhappy with the team’s treatment of its title partner. Upon knowing of the talks between Mercedes-AMG and Aramco, Petronas also began negotiating with Formula 1.
If Aramco signed with Mercedes, Petronas would become Global Partners with Formula 1, and if Aramco went with F1 then Petronas would stay with Mercedes
At the end, the German manufacturer renewed with the Malaysian company and Saudi Aramco went to sign with the sport.
Another factor comes in INEOS, part-owner and main sponsor of Mercedes-AMG F1, having signed a deal with Aramco and TotalEnergies in 2019, investing in the construction of three plants in the Kingdom of Saudi Arabia.
The team’s partnership with Aramco is set to kickstart in 2022, with the company’s green-blue colour palette replacing Petronas’ turquoise accents on Mercedes-AMG’s branding.
By : Lyla Oakes – DECALSPOTTERS