Italy’s Eni and Malaysia’s state-run oil and gas company Petronas have agreed to explore the possibility of forming a joint venture. This partnership would combine and manage some of their upstream assets in Malaysia and Indonesia, Eni announced on Thursday.
Through an exclusive Memorandum of Understanding, the two companies will move forward with detailed discussions to create a joint venture. The goal is to unlock growth opportunities in both countries. The venture is also expected to bring substantial synergies, develop new gas projects, and establish a strong presence in the LNG market in the region, according to Eni.
The joint venture will include about 3 billion barrels of oil equivalent (boe) in reserves, with an additional 10 billion boe of potential exploration upside, Eni said.
The companies plan to focus on investing in new gas development projects. This reflects their commitment to energy transition while also meeting growing domestic gas demand in the region, Eni added.
Any final agreement will need approval from relevant governments, regulatory bodies, and partners.
In recent years, Eni has been shifting its strategy, aiming to group its upstream activities in a way that promotes growth. Last year, Eni said it was considering selling stakes in some of its oil and gas projects in Asia and Africa. This would allow the company to partner with others on these projects while increasing investment in lower-carbon energy.
Eni has taken a different approach compared to its competitors by either selling off or forming joint ventures for its international oil and gas projects. At the same time, it is focusing on spinning off some of its low-carbon projects in a “satellite strategy.”
For instance, last year Eni reached an agreement with UK oil and gas company Ithaca Energy to merge nearly all of its upstream assets in the UK, excluding East Irish Sea assets and carbon capture, utilization, and storage (CCUS) activities. This move is seen as a strategic effort to strengthen its position in the UK Continental Shelf.
Related Topics:
- Shell Projects 60% Increase in Global LNG Demand by 2040
- Oil Prices Under Bearish Pressure as Natural Gas Rises Due to High Demand
- Iraq Reaffirms OPEC+ Commitment Before Resuming Kurdistan Oil Exports