Italy’s energy giant Eni and Malaysian state oil and gas firm Petronas are combining their upstream assets in Indonesia and Malaysia in a new, equally-owned joint venture, the Italian company said on Monday. 

The newly-created joint venture, which will operate as a separate self-sufficient financial entity, plans to invest $15 billion over the next five years, under the deal Eni and Petronas signed at the ADIPEC energy conference in Abu Dhabi today.  

The investment will support the development of at least eight new projects and the drilling of 15 exploration wells, with the aim of developing about 3 billion barrels of oil equivalent (boe) of discovered reserves in Indonesia and Malaysia. 

The new entity, NewCo, will also look to unlock an estimated 10 billion boe of unrisked exploration potential. 

The joint venture will integrate a portfolio of gas-producing and development assets across Malaysia and Indonesia, with an initial production base of over 300,000 barrels of oil equivalent per day (boe/d) and plans to grow to more than 500,000 boe/d of sustainable production in the medium term.

Eni and Petronas will now work to secure all required regulatory, governmental, and partner approvals in both Malaysia and Indonesia. The Italian group expects the deal to reach closing in 2026, following the receipt of all customary and government approvals.

The new business in Southeast Asia is part of Eni’s so-called “satellite model strategy”, following similar ventures such as Var Energy in Norway, Azule in Angola, and Ithaca in the UK.

The Italian energy giant has approached things differently than its peers, attempting to either divest or create joint ventures for international oil and gas projects, while grouping and spinning off some low-carbon projects in a “satellite strategy”.   

For example, Eni last year agreed with major UK oil and gas producer Ithaca Energy to combine substantially all of its upstream assets in the UK, excluding East Irish Sea assets and CCUS activities, in “a strategic move to significantly strengthen its presence on the UK Continental Shelf.”  

By Tsvetana Paraskova for Oilprice.com 

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