Eni and Petronas Form $15 Billion Upstream Venture Across Malaysia and Indonesia

Eni and Petronas have signed a binding agreement to combine their upstream portfolios in Malaysia and Indonesia under a new jointly owned company that will invest over $15 billion in the next five years.

Eni (NYSE: E) and Malaysia’s state energy giant Petronas have finalized a binding deal to merge their upstream oil and gas assets in Indonesia and Malaysia into a new independent entity—referred to as “NewCo”—that will be owned equally by both companies.

The agreement, signed during the ADIPEC energy conference in Abu Dhabi, builds on a framework deal reached in June and marks one of Southeast Asia’s largest upstream consolidations to date. NewCo will hold 19 assets—14 in Indonesia and five in Malaysia—combining Eni’s and Petronas’ complementary portfolios, technical capabilities, and regional expertise.

Under the new structure, the venture will be financially self-sufficient and commit more than $15 billion in investment over the next five years, targeting the development of at least eight new projects and 15 exploration wells. The company expects to develop approximately 3 billion barrels of oil equivalent (boe) in discovered reserves and explore a further 10 billion boe of unrisked potential.

NewCo will start with an initial production of over 300,000 barrels of oil equivalent per day (boe/d), with plans to grow to 500,000 boe/d in the medium term, largely driven by projects in the Kutei Basin in Indonesia and new developments in Malaysia.

Eni CEO Claudio Descalzi hailed the partnership as “a transformational moment,” emphasizing the scale of operational synergies and the acceleration of project timelines it will enable. “By leveraging existing production assets and developing material initiatives in both the Kutei Basin and Malaysia, we expect to deliver over 500,000 boe/d in the mid-term,” Descalzi said.

The deal also fits into Eni’s “satellite model strategy”, which creates regionally focused, semi-independent upstream companies—similar to Var Energi in Norway, Azule Energy in Angola, and Ithaca Energy in the UK. These ventures allow Eni to optimize capital allocation, accelerate development cycles, and attract strategic partners while maintaining operational control.

For PETRONAS, the move consolidates its upstream footprint across two of its key regional markets and aligns with its broader strategy to enhance efficiency, strengthen reserves, and position for growth amid the global energy transition.

Story Continues

The partnership underscores a broader industry trend toward regional consolidation and collaboration among national and international oil companies, particularly in Southeast Asia, where mature basins and emerging frontier areas coexist. The formation of NewCo could also serve as a model for future joint ventures aimed at sustaining production while funding low-carbon initiatives.

Eni and Petronas will now seek regulatory and government approvals in both Malaysia and Indonesia, with closing expected in 2026. Both companies pledged to maintain transparent engagement with stakeholders—including employees, partners, and local authorities—throughout the approval process.

Once operational, NewCo is expected to become a key regional player, with the potential to shape Southeast Asia’s upstream landscape for the next decade through scale, capital discipline, and integrated development strategies.

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com

Chinese Oil Buyers Reduce Russian Purchases India Plans $11.3 Billion Bailout for State Power Firms Japan Tells Trump Tokyo Will Struggle to Ban Russian LNG Imports

Oilprice Intelligence brings you the signals before they become front-page news. This is the same expert analysis read by veteran traders and political advisors. Get it free, twice a week, and you'll always know why the market is moving before everyone else.

You get the geopolitical intelligence, the hidden inventory data, and the market whispers that move billions - and we'll send you $389 in premium energy intelligence, on us, just for subscribing. Join 400,000+ readers today. Get access immediately by clicking here.

View Comments