Italian energy giant Eni and Malaysia’s state-owned Petronas have sealed a game-changing deal to merge most of their upstream oil and gas assets in both Indonesia and Malaysia.
The binding agreement, announced at the ADIPEC energy conference in Abu Dhabi, promises $15 billion of fresh investment and a new competitive force in Southeast Asia’s energy market.
Under the arrangement, a new entity called NewCo will manage 19 assets spanning both countries, marking one of the region’s largest consolidations in years.
The move reflects growing pressure for efficiency, scale, and energy transition as Southeast Asia’s demand for secure gas and sustainable growth intensifies.
What are the details behind Eni and Petronas’ new partnership?
The news comes after months of negotiations, beginning with a memorandum of understanding in February and a framework agreement in June.
The formalized joint venture is structured as an equal 50-50 partnership, with each company pooling significant upstream resources across 14 Indonesian and 5 Malaysian assets.
Announced at the region’s largest energy conference, the tie-up aims to reshape competitive dynamics in upstream exploration and production, enabling both companies to achieve greater operational synergies.
The assets consolidated in NewCo represent vital oil and gas projects already producing, as well as greenfield opportunities yet to be tapped.
The deal signals an accelerated shift towards maximizing discovered resources while seeking new reserves to strengthen Southeast Asia’s supply outlook for decades to come.
Did you know?
Eni’s ‘satellite’ model also shaped the creation of Azule Energy, a mega-joint venture in Angola co-owned with BP, prior to NewCo’s introduction in Southeast Asia.
How significant is the merged asset base for Southeast Asia?
With a daily production base exceeding 300,000 barrels of oil equivalent and ambitions to reach 500,000 barrels per day in the coming years, NewCo will instantly rank among Southeast Asia’s largest independent producers.
The company will operate with management teams deeply embedded in local operations, supported by the global technical expertise and financial firepower of both parent firms.
Over three billion barrels of discovered reserves anchor the portfolio, and another ten billion barrels of potential remain for exploration.
Eni and Petronas’ combined technical skills and proven track records in fast-track project development are expected to enhance resource recovery rates and significantly reduce project lead times compared to solo endeavors.
What are NewCo's investment and growth plans?
A planned $15 billion will fund at least eight new development projects and 15 exploration wells over the next five years. The leadership emphasizes disciplined capital allocation, focusing not only on hydrocarbons but also on cleaner fuels.
Eni CEO Claudio Descalzi described the tie-up as enabling "impressive value creation" for all stakeholders, highlighting the joint venture’s agility in deploying investment where the returns and regional impact are most significant.
Notably, the project roadmap centers on gas as the anchor for Southeast Asia’s energy transition, meeting both domestic demand and supporting regional decarbonization strategies.
Gas is positioned as a bridge fuel, enabling both partners to serve the world’s fastest-rising energy markets.
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How might this joint venture impact regional energy strategies?
The partnership aligns with Eni’s broader satellite strategy, following recent ventures such as Azule Energy in Angola and Var Energy in Norway.
By forming semi-independent, regionally focused companies, Eni and Petronas expect to unlock significant operational synergies and respond faster to national regulatory and strategic priorities.
Malaysia and Indonesia view the joint venture as a boost to domestic supply security and economic development, helping balance the need for reliable energy with the imperatives of emissions reduction.
Local governments are expected to maintain oversight as NewCo integrates indigenous managerial talent and works closely with existing stakeholders.
What are the next steps for regulatory approval and market integration?
The binding agreement stipulates several regulatory and partner approvals in both host countries, with the transaction close targeted for 2026.
Both Eni and Petronas have pledged to retain the existing workforce and management teams to ensure a seamless transition and business continuity.
Until final approvals are in place, NewCo’s operational strategy centers on leveraging the best technical, financial, and project management practices from both parent companies.
Asia’s energy markets will closely watch the overall integration process as an indicator of future consolidation trends and investment opportunities.
NewCo’s success could encourage further cross-border ventures as energy companies adapt to the dual demands of supply security and low-carbon transition.
With ambitious plans, substantial funding, and deep operational expertise, Eni and Petronas are poised to redefine what’s possible for Southeast Asia’s energy future.
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