Singapore, 3 November (Argus) — Malaysian state-owned energy firm Petronas and Italian major Eni today announced they have signed a binding agreement to establish an independent regional upstream joint venture (JV), by combining their respective upstream assets in Malaysia and Indonesia.
This announcement follows a framework agreement in June whereby the firms proposed the establishment of a 50:50 JV that will manage 19 assets — 14 of which are in Indonesia, and five in Malaysia.
The JV, which the firms referred to as NewCo, will be a financially self-sufficient entity, and will invest “in excess of $15bn over the next five years,” Eni said, to develop at least eight new projects, as well as drill 15 exploration wells. The companies aim to develop about 3bn bl of oil equivalent (boe) of discovered reserves, and unlock a further estimated 10bn boe of “unrisked exploration potential,” Eni said.
The companies expect the JV to be established in 2026, and will proceed to try and secure the necessary regulatory, governmental and partner approvals in Malaysia and Indonesia.
The JV aims for an initial production of over 300,000 /d. This is expected to rise to over 500,000 /d in the medium term, by leveraging existing production assets and developing material initiatives in both the Kutei Basin and in Malaysia, said Eni’s chief executive Claudio Descalzi.
Eni in 2024 had around 96,000 /d of mainly gas production in Indonesia, and none in Malaysia. Key to the JV will be Eni’s 5 trillion ft³ Geng North field, which it expects to come on stream in 2027, and its 1.6 trillion ft³ Gehem field. Petronas’ assets have not yet been disclosed.
The JV is part of Eni’s satellite model strategy, which has seen success in other ventures such as Var Energi in Norway and the Angola-focused Azule Energy.
This latest venture will “enable Eni to accelerate project development cycles and optimise capital allocation, and also achieve operational synergies in exploration, production, and asset management, while capturing growth from both mature producing fields and high-opportunity exploration areas,” Eni said.
Petronas has faced headwinds this year, with its total oil and gas output falling to 2.403mn /d in January-June, down by 3.2pc from the corresponding period in 2024, while its revenue dropped by 24pc to 132.6bn ringgit ($31.4bn). The company in June announced it would reduce its workforce by 10pc, as it is navigating a “polycrisis driven by global pressures, coupled with heightened challenges to unlock the full potential of its oil and gas resources in Malaysia.”
By Prethika Nair
