Eni’s gas discovery in the Kutei Basin, Indonesia, and Petronas’ stake in the Abadi LNG development are likely to form key parts of a new Southeast Asian energy major. The Malaysian national oil company and its Italian partner announced plans to merge selected upstream assets into a new, standalone joint venture.
Additionally, Wood Mackenzie expects Petronas to contribute production and exploration assets in Sarawak and Sabah from its domestic portfolio in Malaysia into the new JV. Petronas’ largest domestic oil and gas producing field is the SK316 block in Sarawak, which includes the Kasawari development.
“Managing capital commitments, unlocking new growth opportunities and broadening strategic relationships are the key drivers behind the formation of the new venture,” commented Andrew Harwood, Wood Mackenzie’s VP corporate research, Asia Pacific.
Going forward, the standalone company will have an estimated 3 billion barrels of oil equivalent (boe) in reserves and a combined equity production target of 500,000 boe per day in the medium-term.
For Eni, the move follows similar ventures in Angola, (Azule Energy in partnership with BP), Norway (Var Energi), and the UK (Ithaca). Previous spin-offs by Eni sought to unlock value from non-core assets that struggled to attract capital within a larger portfolio.
But the situation is different in Indonesia – poised to turn out one of the largest producing countries in Eni’s global portfolio by the early 2030s.
