Eni has signed an agreement with Petronas to found a new company owned by both, in jargon a newco, which controls and manages the assets owned by the two oil multinationals in Southeast Asia. Looking in particular towards Indonesia and Malaysia. The objective is to increase the barrels of gas produced from 300 thousand to 500 thousand.
The 15 billion euro investment agreement was signed in the presence of the CEO of Eni, Claudio Descalzi and the president and CEO of Petronas, Tengku Muhammad Taufik.
The agreement between Eni and Petronas
The plan involves the development of eight new projects and the drilling of 15 exploratory wells. These are operations that take place on already discovered wells, which should have a potential production of approximately 3 billion barrels of oil equivalent in natural gas. Plants for 300 thousand barrels per day are coming under management at the property.
The objective, as mentioned, is to bring this figure to 500 thousand at the end of the investment cycle, which will last 5 years. The new company allows Eni, with the support of Petronas, to:
- accelerate the development of these projects;
- optimize the use of investment funds;
- generate synergies in exploration activities and asset management.
Eni’s satellite companies
With this operation, Eni confirms its intention to invest in a satellite company model. More and more parts of the company are being made independent from the central body, with the parastatal giant controlling them at a shareholder level. These are operations similar to those already started in other parts of the world, such as:
- Vår Energi in Norway;
- AzuleEnergy in Angola;
- Ithaca in the UK.
The company itself explained:
Eni confirms its commitment to transparent dialogue with all stakeholders, including people employed by the two companies, host country authorities, joint venture partners and local communities. This approach reflects the shared ambition to launch the new entity through a responsible, efficient and value-oriented process, strengthening the foundations for long-term collaboration and sustainable growth in the region.
Descalzi’s satisfaction
The signing of the agreement took place at Adipec in Abu Dhabi, one of the most important trade fairs in the energy sector. Eni CEO Claudio Descalzi was also present for the occasion, commenting:
This agreement represents a moment of transformation for Eni. We have joined forces with Petronas to manage assets in Indonesia and Malaysia, generating synergies in terms of assets, expertise and financial capabilities. By leveraging existing production assets and developing significant initiatives both in the Kutei basin and in Malaysia, we expect to reach over 500 thousand barrels of oil equivalent per day in the medium term.
Descalzi then underlined the importance of collaboration with Petronas in these countries, to make the most of the expertise of the two companies in specific fields: “This opportunity will lead to significant value creation for Eni, Petronas, Indonesia and Malaysia, thanks to our exploration excellence and proven ability to carry out fast track projects with rigorous financial discipline” declared the CEO.
